Hamilton Place Strategies | 3
an eventual collapse. That being said, small banks made up 82 percent of total failures since 2008 (Exhibit 2).Compliance costs alone can become overly burdensome for small firmswith only a handful of employees. Since 2008, many new regulations havebeen put in place. For example, the Dodd-Frank Act of 2010 was 848pages before the thousands of pages of rules were even written. Comparethat to just 29 pages for the creationof the U.S. banking system in 1864,32 pages for the Federal Reserve Act of 1913 and 37 pages for theBanking Act, which transformed American finance through Glass-Steagall in 1932.
The increasedburden of compliance costs on smallfirms will provide the incentive for greater consolidation.
“The Dodd-Frank Act, Too Big Not to Fail.” The Economist. February 18, 2012.
The burden of increasingcompliance costs onsmall firms willprovide the incentivefor greater consolidation.