‘Many banks are afraid…’: JPMorgan CEO slams US financial regulations ahead poll

JPMorgan Chase CEO Jamie Dimon strongly criticised multiple major US financial regulatory initiatives on Monday, promising to oppose any that he believes won’t enhance bank safety.
The 68-year-old executive, who leads the largest lender in the US, called out what he sees as redundant or poorly designed regulations regarding capital requirements, card payments, and open banking, Reuters reported.
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“It’s time to fight back,” Dimon said at a conference. Many banks are afraid to “fight with their regulators, because they would just come and punish you more,” he added.
“I have been told by people at the Fed, know that because of what you have said and what you wrote about, you know they are coming after you.”
“We are suing our regulators over and over and over because things are becoming unfair and unjust, and they are hurting companies, a lot of these rules are hurting lower-paid individuals,” he said, as reported by Reuters.
As banks await new proposals under what is known as the Basel III endgame, “the devil is in the details,” Dimon said.
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He was referring to a proposal by US regulators in July 2023 to align their standards with those of the Basel Committee on Banking Supervision to help the industry better absorb economic shocks.
The Fed’s regulatory chief Michael Barr last month outlined a plan to raise big bank capital by 9%, easing the previous proposal to hike capital 19%. It was a major concession to Wall Street banks that had lobbied to water down the draft.
Despite the apparent industry victory, the plan was still mired in uncertainty, with key details unclear and the 5 November U.S. presidential election casting doubt over whether it would survive a new administration.
It will be difficult to get anything done if the proposals do not emerge before the election, Dimon said.
The capital surcharge for global systemically important banks was among the “stupidest” elements of the Basel framework, its operational risk calculations were “ridiculous,” and there were “inconsistencies” in the liquidity coverage ratio, he said.
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“The biggest problem I have with all these overlapping rules is that we are not stepping back and saying, what could we do better to make the system work better,” he added.
Dimon has been floated for senior positions on U.S. economic policy, such as Treasury secretary. Despite opining on what qualities the next president should possess, he has not publicly endorsed either candidate.
The bank chief has been among the most strident critics of regulations and has warned the bank is willing to challenge some rules in court when it sees no other choice.
“It is time to fight back,” Dimon told the American Bankers Association, drawing applause and laughter. “We don’t want to get involved in litigation just to make a point, but if you’re in a knife fight, you better bring a knife and that’s where we are.”
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The CEO also said regulators should not allow card-issuing financial services firms such as American Express, Capital One and Discover Financial Services to charge more for debit card transactions.
This is because banks are limited in how much they can charge for debit cards while card issuers have no such limits.
“It’s grossly unfair to allow them to do more,” he said.
Dimon, the longest-serving CEO at a major Wall Street bank, also criticised new rules from the top U.S. consumer finance regulator announced last week, which aim to simplify the process for consumers to switch between financial service providers.
The Consumer Financial Protection Bureau’s “open banking” rule regulates data sharing between fintech companies and traditional banks, enabling consumers to transfer their personal data between providers at no cost.
While Dimon expressed that he is not opposed to open banking, he cautioned that it could jeopardise consumer data and increase the risk of fraudulent money transfers, and he plans to challenge it, the report said.
(With inputs from Reuters)