- JPMorgan Chase CEO says extreme laws by the Feds can pose challenges for US banks.
- Distinguished US banks collapsed not too long ago together with Signature Financial institution, Silicon Valley Financial institution, and First Republic Financial institution.
- Dimon highlights the necessity for a complete method to laws past stress exams.
The CEO of JPMorgan Chase, which not too long ago acquired the bankrupt First Republic Financial institution, has expressed issues about potential difficulties for US banks within the occasion that the Federal Reserve implements extreme laws throughout a time of disaster.
Throughout an interview with Bloomberg on Might eleventh, Jamie Dimon, the Chairman and CEO of JPMorgan Chase, shared his perception that the scenario for banks is predicted to deteriorate additional until the Federal Reserve adopts proactive measures past the mere implementation of extra laws.
Signature Financial institution, Silicon Valley Financial institution, and First Republic Financial institution, three distinguished US banks, have already skilled important collapses throughout the preliminary months of this yr.
Dimon attributed the issue to a scarcity of efficient supervision and positioned the blame on financial institution CEOs and board members. He highlighted that supervisors usually prioritize regulatory compliance reasonably than assessing the general functioning of banks.
Furthermore, Dimon is of the opinion that the present banking disaster can’t be solved by merely including extra laws to the already in depth 200,000-page stress take a look at carried out by the Federal Reserve.
Dimon recommended adopting a extra complete perspective when modifying laws, stating,
At one level, it’s making it more durable for them to do enterprise. There are already a whole bunch of guidelines in place.
Moreover, he raised issues in regards to the effectiveness of stress exams, cautioning that corporations overly fixated on a single stress take a look at would possibly overlook different necessary points, together with recurring historic occasions.
Concurrently, Dimon expressed skepticism in regards to the reliance on a single stress take a look at, as it might create a deceptive sense of safety. He identified that the Federal Reserve didn’t anticipate the banking disaster, noting that not one of the Fed governors predicted it.