The Global Financial Crisis and the Return to Economic Growth
Chapter 6: The regulatory answer
Jamie Dimon, the CEO of JPMorgan Chase, a diversified, global financial company and America’s most profitable bank, made headlines on page one of the Financial Times on 12 September 2011, when he labeled the Basel III international financial regulations agreed by 27 countries, including the United States, as “blatantly anti-American.” He went on to say that the USA “should consider pulling out of the Basel group of global regulators. Our regulators should go there and say, if it’s not in the interest of the United States, we’re not doing it.” Dimon was upset over the capital and liquidity requirements of Basel III. Under the new rules, JPMorgan Chase and about 30 additional global banks will have to keep capital on hand that may reach as much as 9.5 percent. He pointed out that it will be “three to ten years” before the banks emerge from lawsuits brought by investors asking for compensation for the losses incurred on structured financial products backed by bad mortgages. Dimon also confronted Federal Reserve chief Ben Bernanke at the annual meeting of the American Bankers Association in June 2011: “We know there are 300 [Dodd-Frank Wall Street Reform Act] rules coming—has anyone bothered to study the cumulative effect of these things?” Dimon has said that new rules and regulations on the financial industry are not needed. “CDOs [collateral debt obligations] are gone; swaps are almost gone” so why new regulations?
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