Big bank CEOs will likely convey deposits and earnings are stable to lawmakers on Wednesday, according to a major financial services executive. Thomas Michaud, CEO of Stifel company Keefe, Bruyette & Woods, thinks the hearing before the Senate Banking Committee will successfully provide assurance to Washington and Wall Street. Banking chiefs slated to speak at the “Annual Oversight of Wall Street Firms” hearing include JPMorgan CEO Jamie Dimon and Goldman Sachs CEO David Solomon. “The crisis of the spring where we had three of the four largest failures in history is behind us,” Michaud said on CNBC’s ” Fast Money ” on Tuesday. He’s referring to Silicon Valley Bank , Signature Bank and First Republic — the latter of which was the nation’s biggest bank failure since the 2008 financial crisis. Michaud, who testified before Congress in May on the bank failures, hopes Wednesday’s hearing re-addresses the call for changes to prevent bank runs from pushing other financial institutions over the edge. “One way to fix it is deposit insurance reform,” he said. “The targeted approach to change deposit insurance to reduce the ‘too big to fail’ thinking, so depositors don’t run like that. That is what we need, and that effort has stalled in Congress.” He thinks action is needed to keep mid-sized banks competitive with the big banks — starting with lifting Federal Deposit Insurance Corp coverage limits for small businesses. Currently, the FDIC covers $250,000 per depositor, per insured bank, per ownership category — an amount that is likely inadequate for small businesses . “If deposit insurance reform in my opinion doesn’t happen, there’s going to be tremendous pressure on those [mid-size] banks to consolidate,” Michaud said. Disclaimer
