Dimon confronts Bernanke over banking rules

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.

David Moyes and Louis van Gaal
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
ebooksAn unforgettable anthology of contemporary reportage
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

COO / Chief Operating Officer

£80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments