JPMorgan Chase CEO Criticizes Capital Rules Proposed by US Regulators

JPMorgan Chase

Jamie Dimon, the chairman and CEO of J.P. Morgan Chase & Co., has reportedly voiced his criticism of the stricter capital rules proposed by U.S. regulators.

Speaking at a conference in New York, Dimon expressed concerns that these regulations could hinder economic growth, Reuters reported Monday (Sept. 11).

Dimon wondered aloud about the objectives of the regulators and called for more transparency in their decision-making process, according to the report. He emphasized the importance of fairness, transparency and openness in the regulatory environment.

The Federal Deposit Insurance Corporation’s (FDIC) board of directors met Aug. 29 to discuss a Notice of Proposed Rulemaking with the board of governors of the Federal Reserve System and the Office of the Comptroller of the Currency to require insured depository institutions with more than $100 billion in assets to maintain a minimum amount of long-term debt.

Under the proposal, regional banks would need to issue around $70 billion in new debt.

FDIC regulators admitted during the meeting that the new long-term debt rule being proposed would compress banks’ net interest margin by three basis points, as well as marginally increase funding costs for banks.

Dimon had said on Aug. 2 that the proposed requirements would make mortgages and loans less affordable. He told CNBC at the time: “If they want to put all mortgages and small business loans out of the banking system, so be it, but they should tell that to the American public.”

Bank of America CEO Brian Moynihan said on July 27 that new capital requirements need to ensure a level playing field for banks. “I think they have to be careful as they put in these rules not to make the U.S. less competitive,” Moynihan told Fox Business at the time.

In Monday’s presentation at the conference in New York, J.P. Morgan’s Dimon also shared his cautious stance on the Chinese market, highlighting the changing risk-reward ratio, according to the Reuters report.

He said that the risk now outweighs the potential rewards, particularly in light of China’s slow growth rate in the second quarter, which expanded by only 0.8% compared to the previous quarter, the report said.

This is not the first time Dimon has expressed concerns about the uncertainty in the Chinese economy and its impact on investor confidence, per the report. He has consistently emphasized the need for “real engagement” between the U.S. and China on security and trade issues.