- JPMorgan Chase’s CEO says redundant Fed laws may pose challenges for US banks.
- Well-known US banks have just lately failed, together with Signature Financial institution, Silicon Valley Financial institution and First Republic Financial institution.
- Dimon emphasizes the necessity for a holistic strategy to laws, not simply stress testing.
CEO of JPMorgan Chase, who just lately acquired the bankrupt First Republic Financial institutionexpressed concern about potential difficulties for US banks if the Federal Reserve applied extreme laws through the disaster.
Might 11 In an interview with Bloomberg, Jamie Dimon, chairman and CEO of JPMorgan Chase, shared his perception that the scenario for banks ought to deteriorate additional until the Federal Reserve takes proactive measures and never simply the implementation of further laws.
Signature Financial institution, Silicon Valley Financial institution and First Republic Financial institution, three outstanding US banks, have already skilled main failures within the first months of this yr.
Dimon attributed the issue to a scarcity of efficient oversight and positioned the blame on financial institution executives and board members. He emphasised that supervisory authorities normally give precedence to compliance with laws quite than evaluating the general efficiency of banks.
As well as, Dimon believes that the present banking disaster can’t be solved just by including extra laws to the already intensive 200,000-page stress check carried out by the Federal Reserve.
Dimon recommended taking a extra complete perspective on altering laws, stating,
On the identical time, it makes it tough for them to do enterprise. A whole bunch of guidelines are already in place.
He additionally raised issues concerning the effectiveness of stress testing, warning that firms too preoccupied with one stress check may overlook different necessary points, together with recurring historic occasions.
On the identical time, Dimon expressed skepticism about counting on a single stress check as a result of it may create a false sense of safety. He identified that the Federal Reserve didn’t predict the banking disaster, noting that not one of the Fed governors did.
