Wall Street bank bosses to warn US lawmakers that new regulations will
hurt economy
Send a link to a friend
[December 06, 2023] By
Pete Schroeder and Michelle Price
WASHINGTON (Reuters) - Top bosses of JPMorgan, Morgan Stanley, Goldman
Sachs and other major banks planned on Wednesday to warn lawmakers that
capital hikes and other new regulations being contemplated by U.S. bank
regulators will hurt credit markets and the broader economy.
Worker pay and rights, mortgages, financial stability and the economy
are also likely to feature when the CEOs of the country's eight largest
banks appear before the Senate Banking Committee on Wednesday, said
executives and analysts.
The industry has been waging a fierce campaign to kill the "Basel
Endgame" proposal, which overhauls how banks must calculate their
loss-absorbing capital, and as regulators roll out fair lending and fee
cap regulations, among other rules.
It offers the CEOs an opportunity to try to convince key moderate
Democratic senators that the Basel rule, which is being led by the
Federal Reserve, could stifle lending, hurting small businesses and
consumers.
"If enacted as drafted, this proposal will fundamentally alter the U.S.
economy in ways that the Federal Reserve has not studied or
contemplated," Jamie Dimon, CEO of the country's largest lender
JPMorgan, will say in his prepared testimony published by the Committee
on Tuesday.
"Many banks will simply stop offering certain products and services, and
those that do will have to charge more for them."
Other new consumer regulations also show an "alarming" lack of rigorous
economic analysis, Dimon will also say.
The other CEOs appearing are: Bank of America's Brian Moynihan, Wells
Fargo's Charles Scharf, Goldman Sachs' David Solomon, Morgan Stanley's
James Gorman, State Street's Ronald O'Hanley, and BNY Mellon's Robin
Vince.
[to top of second column] |
JPMorgan Chase & Co President and CEO Jamie Dimon attends a U.S.
House Financial Services Committee hearing titled ?Holding Megabanks
Accountable: Oversight of America's Largest Consumer Facing Banks on
Capitol Hill in Washington, U.S., September 21, 2022.
REUTERS/Elizabeth Frantz/File Photo
Regulators say new rules, including capital hikes, are necessary to
protect the banking system from unforeseen shocks, especially
following the collapse of Silicon Valley Bank and two other lenders
earlier this year. While CEOs are expected to have the support of
Republicans who generally oppose tight regulations, they will have
to persuade skeptical Democratic lawmakers that the banking sector
is sound.
"The U.S. banking system remains strong and is the envy of the
world," Morgan Stanley's Gorman will say. "Blanket increases in
capital for the large U.S. banks – who already undergo rigorous
stress testing each year and are required to maintain additional
specific capital buffers – is wholly unnecessary."
Big bank CEOs have been appearing before Congress for several years
after the 2007-09 financial crisis and subsequent scandals thrust
the industry into Washington's crosshairs.
While they rarely result in legislation, hearings have led banks to
make changes. In 2021, Dimon was drawn into a fiery exchange with
Democratic Senator Elizabeth Warren about overdraft fees, while last
year she grilled him over fraud on bank payment network Zelle. Big
banks subsequently reduced overdraft fees and expanded Zelle fraud
protections.
(Reporting by Pete Schroeder and Michelle Price; Editing by David
Gregorio)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|