Jamie Dimon, CEO of JPMorgan Chase, criticised the tighter capital requirements put forth by American authorities, warning investors on Monday that they would cause lenders to draw back and stifle economic growth.
Dimon said at a conference in New York that the idea to compel banks to set aside more capital to defend against risk was “hugely disappointing” and featured a “lack of transparency” from regulators about the justification.
The head of the biggest bank in the United States continued, “I wouldn’t be a big buyer of a bank,” to the audience’s laughing. I would be of comparable weight, at best.
Earlier this year, JPMorgan acquired First Republic in a deal supported by the government.
Dimon questioned the goals of the regulations and what they were intended to achieve. All he wished for was fairness, openness, and transparency.
The Office of the Comptroller of the Currency, the Federal Reserve, and Federal Deposit Insurance Corporation all declined to comment.
WORLD ECONOMY
Dimon asserted that he thought the Chinese market was no longer as profitable as it once was. He said that his trip to China in May, which was his first in four years, had taught him to be “highly cautious.”
“The risk-reward (from China), which was very good, has now become okay in terms of our own business. The bank is cautious in how it manages its risk, he said, adding that the risk is bad.
Gross domestic product increased by just 0.8% from the first quarter as China’s economy expanded at a sluggish rate.
As well as saying that the United States and China need “real engagement” on security and trade concerns, Dimon previously issued a warning about how uncertainties in the Chinese economy may undermine investor confidence.
Despite the continued strength of the banking and consumer sectors in the United States, Dimon claimed to be more apprehensive than others regarding the current state of the economy.
Simply said, I believe it is wrong for individuals to focus just on current data and ignore the future. Quantitative tightening is a feature of the future. The war in Ukraine is still going on, and we’ve been spending money like inebriated sailors all over the place, he added, adding that it was a grave error to believe that the economy would continue to grow for years.
Quantitative tightening is the reversal of the huge asset purchases made by central banks to bolster bond markets during the global financial crisis 15 years ago and as the coronavirus struck in 2020.
Even while the economy appears to be doing well right now, he cautioned that the effects of ending the fiscal stimulus programme may not become apparent for another 12 to 18 months.