The final days of the Euro region may be in the offing. Capital rules on banks should be examined and perhaps scaled back.
In an interview with Bloomberg Television, JPMorgan Chase CEO Jamie Dimon weighed in on several subjects, including the two just mentioned, and in some instances, his diagnoses were stark.
In speaking about Europe, Dimon said in the interview conducted from Davos that a splintering of the region might be in the offing if leaders do not spend time confronting populism; otherwise, “the Euro zone may not survive.”
One key is to understand what led to the Brexit vote, with attendant issues on what Dimon termed “political things about immigration, the laws of the country [and] how much power goes to Brussels.”
When asked about the incoming Trump administration and in contrast with concerns about European-based populism, Dimon said he is less concerned about the latter. He posited that Trump has been busy bringing on “very serious people” in policy positions. As such, a trade war with China is unlikely as the administration will itself be, as Dimon projected, “very thoughtful when they go about the actual policy.”
Turning to his own sector, banking, Dimon said that he does not favor a full-scale rollback of the Dodd-Frank Act, preferring instead that the incoming administration and Congress “should open it up, look what worked, look what didn’t, recalibrate it, modify it, change it to accomplish what we want to do, which is what I call good regulation, not just more regulation.”
As part of that examination, he added, requirements for liquidity and bank capital should be reconsidered, as capital could be freed up rather than being kept on the books.