- The CEO of JPMorgan Chase stated overregulation by the Fed can pose issues for US banks.
- Main US banks have just lately collapsed, together with Signature Financial institution, Silicon Valley Financial institution and First Republic Financial institution.
- Dimon stresses the necessity for a complete regulatory method past stress testing.
The CEO of JPMorgan Chase, who just lately acquired the bankrupt First Republic Financial institutionexpressed considerations about potential hardship for U.S. banks within the occasion the Federal Reserve implements extreme rules in instances of disaster.
In an interview with Bloomberg on Might 11, Jamie Dimon, the CEO of JPMorgan Chase, shared his perception that the scenario for banks is prone to deteriorate additional except the Federal Reserve takes proactive measures past the straightforward implementation of extra rules.
Signature Financial institution, Silicon Valley Financial institution and First Republic Financial institution, three main US banks, have already skilled important collapses within the first months of this yr.
Dimon blamed the issue on an absence of efficient oversight and blamed the banks’ CEOs and board members. He identified that supervisors usually prioritize regulatory compliance over assessing the general functioning of banks.
Furthermore, Dimon believes that the present banking disaster can’t be solved by merely including extra rules to the already complete 200,000-page stress take a look at carried out by the Federal Reserve.
Dimon instructed taking a extra holistic perspective when altering rules, saying,
In some unspecified time in the future, it’s harder for them to do enterprise. There are already lots of of guidelines in place.
Moreover, he raised considerations in regards to the effectiveness of stress assessments, warning that corporations too obsessive about a single stress take a look at may overlook different essential points, together with recurring historic occasions.
Concurrently, Dimon expressed skepticism about counting on a single stress take a look at, as it will probably create a misleading 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.
