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Fed 'dictatorship' kills capitalism by overregulating banks, top analyst Dick Bove says

Dick Bove: Banks forced to 'siphon' money into gov't coffers

The big banks made more money a decade ago than they do now because of stifling government regulations and Federal Reserve controls, closely followed banking analyst Dick Bove told CNBC on Wednesday.

"It'll take until 2019 for Wells Fargo to make as much money as it made in 2009," the Rafferty Capital analyst said.

"Goldman Sachs hasn't come close to what it earned 10 years ago," he continued. Morgan Stanley also had a much bigger year about 10 years ago than it had at the present time."

Morgan Stanley on Wednesday morning became the latest bank to report quarterly results that beat expectations on earnings and revenue in the third quarter.

Fed's 'dictatorship' has taken away capitalism: Dick Bove

"The dictatorship of the Fed on the regulatory side has basically taken away capitalism," Bove said in an interview on "Squawk Box." "The Fed makes the decision of what the cost of money should be. It makes the decision of what the quantity of money should be."

The increased central bank oversight since the 2008 financial crisis has in effect nationalized the banks, he argued, noting banks are sitting on "staggering amounts" of money they can't lend "because presumably the borrowers don't want it."

The regulations put in place by the Dodd-Frank Wall Street Reform Act have caused the velocity of money in the U.S. to decline, Bove said, a trend he sees as hurting the U.S. economy and resulting in "tens of thousand" job cuts and branch closures in the financial sector.

"The banks have been forced to siphon staggering amounts of money in the coffers of the U.S. government, directly and through the Federal Reserve, as a result of all these regulations being thrown at them," he added.

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