The argument over whether banks need to face tighter regulations rumbles on, with the head of America’s largest financial institution claiming calls for a break up would do serious harm to the country’s financial system.
Revealing a decline in quarterly profits of 6.6 percent, JPMorgan Chase CEO Jamie Dimon claimed that banks were “under assault” from a number of regulators, and that this has seriously impacted on the company’s ability to operate successfully. In November, the bank was forced to pay $990m worth of fines because of its actions in the foreign exchange markets.
JPMorgan Chase CEO Jamie Dimon claimed that banks were “under assault”
Dimon told analysts and investors in a conference call, “We have five or six regulators or people coming after us on every different issue. It’s a hard thing to deal with.” He added that the payments were likely to continue, although he hoped they would return to normal rates soon. “The several billion dollars that we’re going to have to pay for legal stuff, we want to fix it. And it’s unfortunate we do this to you all, but it’s unavoidable right now.”
Some that claim US financial institutions had been free to run amok in the years preceding the financial crisis of 2008 have welcomed the severity of the fines to hit banks like JPMorgan. However, Dimon warns that the country’s dominance of the global financial system is under threat if regulators try and restrict banks much more.
He said, “America has been the leader in global capital markets for the last 50, 100 years. It’s part of the reason the country is so strong. As a matter of public policy, I wouldn’t want to see the next JPMorgan Chase be a Chinese company.”
Some critics of the industry have claimed that large banks should be split up into separate operations, so that the riskier parts of the business did not impact on deposits. However, Dimon argues that doing so would prevent the banks from operating on a global level. “There is a reason you have big global multinational banks, and they serve big global multinationals, including governments. This company moves $6tn- $10tn a day. You’re not going do that as a small bank and you’re not going to take it out of a $20bn bridge loan, and you can’t do certain things globally in 20 countries if you aren’t in 20 countries.”