Jamie Dimon, the Chief Executive Officer of JPMorgan Chase (NYSE: JPM) was able to navigate his firm through the financial crisis relatively unscathed, and even picked up a few business opportunities in the process. While Dimon has been revered in Wall Street circles and commended for his vision and strategy at the New York based bank, he is equally known for his tenacity and outspokenness.
Although he displayed the resemblance of a happy patriot during the financial crisis and accepted government money (then promptly paid it back in full with interest), his tune seems to be changing. Dimon delivered a diatribe to the U.S. Chamber of Commerce conference in Washington, where he took on mortgage and derivative regulation, too big to fail, capital rules and foreign regulators. The key to his comments are this thoughts that regulations will hurt America. He cautioned that regulators have a lot of “misconceptions” about just about everything, a commonly held perception that may prove startlingly true in light of the immense failures regulators have displayed in recent years.
Dimon commented “This is still the best system in the world…Let’s not destroy that.” Part of financial regulatory reform will also include capital requirements, which Dimon warned would hurt U.S. banks if they are harsher than European rules. “How we count capital: Negative for America,” Dimon said. “If we have higher capital requirements than the rest of the world, now you are just putting the nail in the coffin.” He also sounded off on the increasing number of regulators, stating “We had too many regulators, too many gaps and too much overlap…we added more,” Dimon continued. “It’s even more complicated now.” Although Dimon is critical of many of the rules and plans, the lack of clarity on what will ultimately be is most bothersome. On this topic, he added “Get it done now. I think all this debate and anger and shrillness, that is damaging. If you think that is helping growth, it is not.”
The public outcry over the so called “Too Big To Fail” status of the nations banks is mostly misguided, and Dimon argued that regulators need to let banks fail.All those pundits saying the banks continue to benefit from an implicit backstop are wrong, he said in response to what one has to admit was a pretty gutsy audience question picking Dimon’s brain on his government guarantee.“We don’t have a government guarantee,” he said. “The big misconception is that banks are getting cheaper costs of funds. The average AA bank’s costs are higher than average AA corporate. That was true even right after they were said you’re too big to fail.”