JPMorgan's Dimon Warns of Regulatory 'Nail' in Coffin

Submitted by: Francis Soyer
04/01/11

Francis is posting this one because the pattern with the banking system before the rabbit gets pulled out of the hat so to speak is usually telegraphed in advance. In this case Dimon is speaking not so much about the Frank Dodd regulations which may look good on paper but in real terms are toothless proposed regulations is talking more to the point on the implementation of BASEL III. BASEL III is the new banking reserve requirements as dictated by the BIS (Bank for International Settlements) the hub of central banking power. This testimony by Dimon is basically a telegraph so that when the global finanicial system collapse occurs and IT WILL over the next 20 months basically he gets his get out of jail free card for being able to say I told you so....

Published: Thursday, 31 Mar 2011

1:50 AM ET By: Tom Braithwaite, Financial Times
 
Jamie Dimon, chief executive of JPMorgan Chase, launched a broadside against financial regulation on Wednesday, warning that new capital rules could be “the nail in our coffin for big American banks.”
 



Regulators are negotiating international capital standards for the biggest banks but the chief executive of JP Morgan Chase [JPM 46.10 -0.35 (-0.75%) ] said setting the new requirements too high, or allowing overseas banks to calculate their asset base differently, could disadvantage US banks and was already stifling economic growth.
“If you want to set it so high that no big bank ever goes bankrupt... I think that would greatly diminish growth,” he told a US Chamber of Commerce conference.
Too large a disparity in capital requirements between Europe and the US would mean “you’re pretty much putting the nail in our coffin for big American banks,” he said.
Urging regulators to make a quick decision, he said the uncertainty meant banks were already restricting their lending, nervous of the “anger and the shrillness – and Switzerland says it’s got to be 19 percent and people in the UK say it’s got to be 15 percent.”

“If you think that’s helping growth, it’s not,” Mr. Dimon said, adding that a 7 percent capital ratio would be adequate.
Mr. Dimon’s comments come as Wall Street executives and Republican members of Congress are starting to attack regulation as anger at the financial industry subsides.
On Tuesday, Alan Greenspan, the former Federal Reserve chairman, wrote in the Financial Times that the Dodd-Frank financial reforms risked creating “the largest regulatory-induced market distortion since America’s ill-fated imposition of wage and price controls in 1971”.
Spencer Bachus, the Republican chairman of the House financial services committee, has said that regulators are there to “serve” the banks and warned the Treasury not to hurt Goldman Sachs’ [GS 158.60 -0.47 (-0.3%) ] shareholders when it writes new rules implementing Dodd-Frank. Restrictions on debit card fees charged to retailers are also coming under attack in Congress.