Jamie Dimon to criticize bank capital requirements and lament impact of inflation on regular Americans in coming Capitol Hill testimony

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JPMorgan Chase & Co. CEO Jamie Dimon will focal point the majority of his ready remarks in Congress this week on the bank’s certain function in the U.S. financial system and the danger of inflation, however will spend a while criticizing capital requirements for banks, in accordance to his written testimony.

“We finance Americans’ ambitions with loans for homes, autos, and growing a small business, and provide valuable products and services to more than half of American households,” Dimon stated in 14 pages of written testimony submitted Tuesday forward of his appearance in Congress this week with other bank CEOs.

Dimon stated the U.S. financial system these days faces certain tailwinds in the shape of sturdy client spending and “encouraging” activity experiences, however headwinds from upper costs and different woes such because the Ukraine conflict.

Also Read: Fed says banks could withstand 10% unemployment, 55% stock price drop in annual stress test

“Americans are being crushed by high inflation eroding real incomes, particularly from higher prices on gas and food,” Dimon stated in his written testimony. “Many Americans are feeling the pain, and consumer confidence continues to drop.”

Regulatory capital requirements for banks are “not reflective of actual risk” and are due to this fact provide a “significant economic risk” as a result of “unrepresentative capital requirements erode banks’ ability to meet customer needs,” Dimon stated.

Also Read: JPMorgan exec sees roughly 50% chance of ‘mild’ recession and eyes chance to hire laid-off bankers

JPMorgan Chase
JPM,
-1.66%

is these days required to stay $200 billion on its steadiness sheet as section of its capital requirements, in addition to its mortgage loss reserves. JPMorgan’s capital requirements are going to upward push in coming months, no longer as a result of of chance however as a result of of regulations that experience but to be adjusted.

“This is bad for America, as it handicaps regulated banks at precisely the wrong time, causing them to be capital constrained and reduce growth in areas like lending, as the country enters difficult economic conditions,” Dimon stated.

On the topic of recession possibilities, Dimon most commonly reiterated his ideas from May when he predicted an economic hurricane however stated he wasn’t certain if it could be a blockbuster hurricane or a extra minor downturn.

“While these storm clouds build on the horizon, even the best and brightest economists are split as to whether these could evolve into a major economic storm or something much less severe,” Dimon stated. “Regardless, JPMorgan Chase is prepared for even the worst outcome.”

Dimon’s testimony comprises descriptions of the bank’s paintings on PPP loans, services and products for patrons and small trade, efforts to spice up diversification in its loans and its paintings drive, and how the bank stays responsible to its shareholders.

Also Read: Can an effort to revamp anti-redlining lending laws survive the swamp?

JP Morgan stocks have fallen 26% in the 12 months to date, whilst the Financial Select Sector SPDR ETF
XLF,
-1.32%

has fallen 16% and the Dow Jones Industrial Average
DJIA,
-0.96%

has misplaced 15%.

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