In a Bloomberg tv interview on Could 11, JPMorgan Chase Chair and CEO Jamie Dimon stated he believes it is “going to worsen for banks” except the Federal Reserve takes proactive measures past merely creating extra rules.
In simply the primary few months of the 12 months, three main U.S. banks collapsed — Signature Financial institution, Silicon Valley Financial institution and First Republic Financial institution.
Dimon stated that it’s “a supervision downside,” with the financial institution CEOs and board members the “folks accountable,” as supervisors often give attention to if they’re abiding by rules.
Nevertheless, Dimon believes including extra rules to the Federal Reserve’s already 200,000-page lengthy stress check just isn’t the answer to the present banking disaster.
He argued that extra rules make it tougher for banks to conduct enterprise, noting that “a few of these group banks now have extra compliance folks than mortgage officers.”
As an alternative, he proposed taking a holistic method when modifying rules, saying:
“At one level, it’s making it tougher for them to do enterprise. There are already lots of of guidelines in place.”
He additional questioned the effectiveness of stress checks, as firms that utterly give attention to “that one stress check” may very well be overlooking points, resembling historic occasions that “all the time occur” once more.
He believes that focusing solely on one stress check offers a “false sense of safety.”
Dimon instructed that that the Federal Reserve by no means noticed points rising within the banking trade, noting that “not one Fed governor forecasted” the banking disaster.
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This isn’t the primary time a JPMorgan govt has expressed points with banking rules in current occasions.
Bob Michele, the chief funding officer of J.P. Morgan Asset Administration, acknowledged in an April 27 Bloomberg tv interview that First Republic Financial institution’s liquidity points “ought to by no means have occurred,” as banking is the “most closely regulated capitalized trade on the planet.”
Extra not too long ago, it was reported on Could 1 that JPMorgan was set to accumulate First Republic Financial institution’s (FRB) belongings, after its earlier efforts to rescue it failed.
1/ On Monday, JPMorgan Chase acquired a considerable majority of belongings and assumed sure liabilities of First Republic Financial institution from the FDIC. https://t.co/2a3bnTJJJW
— First Republic (@firstrepublic) Could 5, 2023
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