JAMIE DIMON, chairman and chief executive officer of JP Morgan Chase, used his annual letter to shareholders to rail against “contrived” and confusing financial rules that could stymie lending.
US and international officials “made the recovery worse than it otherwise would have been”, Mr Dimon wrote in the letter, released yesterday. They almost botched the US debt-ceiling vote, constrained bank leverage “at precisely the wrong time” and adopted bad and unco-ordinated policy, he wrote.
Mr Dimon (56) defended a banking industry that has been besieged by new rules and public contempt after lax mortgage lending contributed to the worst economic slump since the Great Depression. He championed the use of derivatives and the right of banks to lobby lawmakers, and hailed the US economy and corporations as engines of job growth.
Mr Dimon described a cap on debit-card transaction fees, a provision of the Dodd-Frank Act, as “price-fixing by the government that will have the unfortunate consequence of leaving millions of Americans unbanked”.
Stricter capital rules would make it “prohibitively more expensive” for banks to lend to consumers with subprime credit scores – about 40 per cent ofAmericans.
“Jamie has taken on this mantle of defending this entire industry,” said Michael Driscoll, who worked for Mr Dimon as a trader at the Smith Barney brokerage and is now visiting professor at Adelphi University in Garden City, New York. “He’s combative by nature. And like a lot of these alpha dogs, when he’s backed into a corner, hes going to bark back.”
Mr Dimon said he agreed with the intent of most of the financial reforms passed by Congress. He said he supported giving regulators the authority to unwind failing firms and say on some executive-compensation issues.
“But . . . simplicity, clarity and speed would be better for the system and better for the economy.” Phil Angelides, who led the Financial Crisis Inquiry Commission, said he disagreed with Mr Dimon’s criticisms of the new regulations. “In the run-up to the crisis in 2008, we had almost no rules, almost no cops on the street, and what you want is a stable financial sector so it can deploy capital to build an economy in this country,” Mr Angelides said. – (Bloomberg)
