‘It’s going to get worse for banks’ — JPMorgan CEO on overregulation

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The CEO of JPMorgan Chase– which recently took over stopped working First Republic Bank– thinks there might be more pain ahead for United States banks if the Federal Reserve goes into crisis mode with overregulation.In a Bloomberg tv interview on May 11, JPMorgan Chase Chair and CEO Jamie Dimon said he thinks its “going to get worse for banks” unless the Federal Reserve takes proactive measures beyond just developing more regulations.Jamie Dimon speaking on Bloomberg Surveillance. Source: BloombergIn just the first couple of months of the year, 3 significant U.S. banks collapsed– Signature Bank, Silicon Valley Bank and First Republic Bank.Dimon stated that its “a guidance issue,” with the bank CEOs and board members the “individuals to blame,” as managers usually focus on if they are complying with regulations.However, Dimon believes adding more guidelines to the Federal Reserves currently 200,000-page long stress test is not the option to the present banking crisis.He argued that more guidelines make it harder for banks to carry out service, noting that “some of these neighborhood banks now have more compliance people than loan officers.” Instead, he proposed taking a holistic method when customizing regulations, stating:” In a great deal of ways is to blend the guidelines. Perhaps not Capital if youre going to alter liquidity. If youre going to change Capital, perhaps not liquidity.” He even more questioned the effectiveness of tension tests, as business that totally concentrate on “that a person tension test,” might be neglecting issues, such as historical occasions that “always occur” again.He thinks that focusing solely on one tension test gives a “false sense of security.” Dimon suggested that the Federal Reserve never ever saw issues emerging in the banking market, keeping in mind that “not one Fed governor forecasted” the banking crisis.Related: JPMorgan sees benefits in deposit tokens over stablecoins for industrial bank blockchainsThis is not the very first time a JPMorgan executive has revealed problems with banking policies in current times.Bob Michele, the chief investment officer of J.P. Morgan Asset Management, stated in an April 27 Bloomberg television interview that First Republic Banks liquidity issues “ought to never have actually occurred,” as banking is the “most heavily managed capitalized market on earth.” More just recently, it was reported on May 1 that JPMorgan was set to acquire First Republic Banks (FRB) assets, after its previous efforts to rescue it failed.1/ On Monday, JPMorgan Chase got a substantial bulk of properties and presumed specific liabilities of First Republic Bank from the FDIC. https://t.co/2a3bnTJJJW— First Republic (@firstrepublic) May 5, 2023