Dimon confronts Bernanke over banking rules
Wednesday 08 June 2011
Jamie Dimon, chief executive of JPMorgan Chase, one of Wall Street's most powerful banks, took his complaints about too much regulation directly to the chairman of the Federal Reserve last night, challenging Ben Bernanke to prove that new banking rules are not crimping the economic recovery.
Mr Dimon declared his "great fear" that academics will look back a decade from now and conclude that Wall Street reforms, including extra capital requirements on the biggest banks and curbs on derivatives trading, caused banks to pull back on lending and therefore held back the economic recovery.
The bank boss assailed Mr Bernanke with a long list of the new rules, and demanded to know if anyone at the Fed or elsewhere had "bothered to study the cumulative effect of these things" on bank lending.
The confrontation took place during a question-and-answer session at the International Monetary Conference in Atlanta, Georgia, after Mr Bernanke had made a hotly anticipated speech on the US economy, his first remarks since a slew of disappointing data on manufacturing, housing and jobs last week.
"Your list made me feel pretty good, it sounds like we are getting a lot done," the Fed chairman told Mr Dimon. "There are many, many things to fix."
Mr Bernanke said that the credit crisis had revealed so many interrelated dangers in the financial system, and that the regulatory remedies were too many and too various, to be able to answer Mr Dimon's challenge.
"But we certainly are trying in each part to develop a system that is coherent and is consistent with banks providing their social function of providing credit," he said.
Earlier, Mr Bernanke had endorsed international plans to impose extra capital requirements on the biggest and most systemically important banks, which will certainly include Mr Dimon's institution. And pointedly, in answer to Mr Dimon, he said that there would be exemptions from some of the harshest rules for the smallest banks. "If you think it is difficult for JPMorgan Chase, it is very difficult for the small banker and community banker," Mr Bernanke said.
In his speech, the Fed chair insisted that the US economy will get through its soft patch and return to stronger growth in the second half of the year, and pinned his optimism on lower oil prices and an end to the disruptions to global manufacturing from the Japanese tsunami.
But he delivered a warning that US lawmakers could stymie the recovery by insisting on too many cuts to federal spending in the next year or two. He proposed a deal to raise the debt ceiling that would instead focus on making longer-term budget cuts.
- 1 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 2 Greece debt crisis explained: A history of just how the country landed itself in such a mess
- 3 People all over the world are getting semicolon tattoos to draw attention to mental health
- 4 Greek debt crisis: Yanis Varoufakis's funniest (and most memorable) quotes
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
Greece debt crisis explained: A history of just how the country landed itself in such a mess
German conservatives are destroying Europe with austerity, says economist Thomas Piketty
Man dies instantly after shooting firework from top of his head
Isis schoolgirl Amira Abase who fled London to join terrorists in Syria mocks victims of Tunisia massacre
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...