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.