If You Ask Me: A Global Banker Reflects on Our Times

Wriston, Walter B.


Take the Handcuffs off Everybody


I've got a question on the foreign banks. Do you feel that foreign banks in the United States should remain essentially unregulated with respect to reserve requirements, branching laws and acquisitions?

I've always favored inviting them in--and they have responded by taking a good share of our market.

My view, from day one, has been that instead of putting handcuffs on them, why not take them off us? I'm not afraid to compete anywhere anytime on a reasonably equitable basis. I think historians will look back and see the enormous influx of foreign banks as one of the factors that modernized our domestic banking system at great benefit to our people.

Does the additional competition have much impact on interest rates?

It has squeezed the margins down very substantially for two reasons. First: reserve requirements add about fifteen or twenty base points to our cost, but not to theirs. Second: the European and the Japanese banks do not have the capital ratios that our regulators think are good for us. So, their gearing is much higher, and their costs are much less. Those are our main disadvantages opposite foreign banks in the United States.

What about competing with foreign banks worldwide?

First of all, the competitive disadvantage is sort of like flying against SAS.[28]  A lot of the overseas banks are owned by their governments, like the three big French banks. Their gearing ratio and their capital would put any New York bank into bankruptcy. Their total earnings base is a joke, and they meet us head on without our reserve requirements. They're pricing loans at some razor thin spreads.

Second, they have the support of their governments. When I make customer calls around this world, a guy will say to me, "The U.S. Ambassador hasn't been to see me." And I'll say, "Why should he?"

Then he says, "The German Ambassador was just here complaining that Deutschebank got only four hundred credits last year." The last place you go to get business for an American bank is the American Embassy. We have more of an adversarial position with our government. I'm not saying that's bad, but you asked about the competitive advantages. And that's one.


[28] Scandanavian Airline System is owned jointly by the governments of Sweden, Norway and Finland.

  • The document was created from a compilation of interviews and question and answer segments with Walter B. Wriston which was later compiled into "If You Ask Me: A Global Banker Reflects on Our Times" in 1980. The original speech is located in MS134.001.034.00018.
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 Title Page
If You Ask Me: A Global Banker Reflects on Our Times
I: Getting Down to Fundamentals
The Big Cop-out
You Can't Go Bail for Everyone
Risk Is What It's All About
II: Some Basic Ills of the Body Politic
Lincoln Wouldn't Have Made It
Unpredictable Is a Dangerous Country
The Pitfalls of Single-issue Politics
Expect To Get Zapped
The Perils of Legal Pollution
The Injustice of Our Tax System
Those Wonderful People Who Bring You Inflation
Stop the Presses
Silly Premises Lead to Nutty Conclusions
Easier Said Than Done
III: New York, New York
New York City Is Alive And Well
The Road Back
IV: Careers
Rx for Happiness
Good Forward Planning
Dull Job?
A Simple Matter of Survival
Making It at Citibank
What Fast Track?
No Hiding Place
V: Once Around the World Quickly
South Africa
China: A Matter of Timing
The Real Significance of Iran
Iran and the Money Markets
Fashions in Country-criticizing
VI: The Global Financial Scene
The Elusive Eurodollar
De Facto Payments Mechanism
Too Big To Move
The Foreign Exchange Game
They Can't Leave the System
Baskets of Money
Swiss Francs
The Value of a Dollar
Not a Loss Since 1897
A Rational View of LDC Loans
Free Trade Benefits Consumers
The Destructive Costs of Regulation
The Big Rip-off
A Real Entitlement
Can Regulations Prevent Bum Loans?
The Insidious Side of Controls
Competition in Regulation
VIII: The Shape of Things To Come
Not As Big As You Think
What Lobby?
Armageddon Is Late, as Usual
Some Simple Facts about Interest Rates
An Expensive Luxury
How Big Is Big?
What We Did Yesterday Won't Work Tomorrow
A Matter of Semantics
Unpredictable Is a Dangerous Country
Privacy: A Serious Problem
The Unseen Revolution
Things Are Going To Be Different
Take the Handcuffs off Everybody
The Gray Areas of Lending
No Mouse under the Rug
Thank God We Don't Have National Banking
Competition Keeps You Awake
Accounting for Loan Losses
Not a Utility
People Like It
Computer Frauds
Some Final Words on Responsibility
About the Author