In this articleCJPMFollow your favorite stocksCREATE FREE ACCOUNT(L-R) Brian Moynihan, Chairman and CEO of Bank of America; Jamie Dimon, Chairman and CEO of JPMorgan Chase; and Jane Fraser, CEO of Citigroup; testify during a Senate Banking Committee hearing at the Hart Senate Office Building on December 06, 2023 in Washington, DC. Win Mcnamee | Getty ImagesWall Street CEOs on Wednesday pushed back against proposed regulations aimed at raising the levels of capital they’ll need to hold against future risks.In prepared remarks and responses to lawmakers’ questions during an annual Senate oversight hearing, the CEOs of eight banks sought to raise alarms over the impact of the changes. In July, U.S. regulators unveiled a sweeping set of higher standards governing banks known as the Basel 3 endgame. “The rule would have predictable and harmful outcomes to the economy, markets, business of all sizes and American households,” JPMorgan Chase CEO Jamie Dimon told lawmakers.If unchanged, the regulations would raise capital requirements on the largest banks by about 25%, Dimon claimed.The heads of America’s largest banks, including JPMorgan, Bank of America and Goldman Sachs are seeking to dull the impact of the new rules, which would affect all U.S. banks with at least $100 billion in assets and take until 2028 to be fully phased in. Raising the cost of capital would likely hurt the industry’s profitability and growth prospects.It would also likely help non-bank players including Apollo and Blackstone, which have gained market share in areas banks have receded from because of stricter regulations, including loans for mergers, buyouts and highly indebted corporations.While all the major banks can comply with the rules as currently constructed, it wouldn’t be without losers and winners, the CEOs testified.Those who could be unintentionally harmed by the regulations includes small business owners, mortgage customers, pensions and other investors, as well as rural and low-income customers, according to Dimon and the other executives.”Mortgages and small business loans will be more expensive and harder to access, particularly for low- to moderate-income borrowers,” Dimon said. “Savings for retirement or college will yield lower returns as costs rise for asset managers, money-market funds and pension funds.”With the rise in the cost of capital, government infrastructure projects will be more expensive to finance, making new hospitals, bridges and roads even costlier, Dimon added. Corporate clients will need to pay more to hedge the price of commodities, resulting in higher consumer costs, he said.The changes would “increase the cost of borrowing for farmers in rural communities,” Citigroup CEO Jane Fraser said. “It could impact them in terms of their mortgages, it could impact their credit cards. It could also importantly impact their cost of any borrowing that they do.”Finally, the CEOs warned that by heightening oversight on banks, regulators would push yet more financial activity to non-bank players — sometimes referred to as shadow banks — leaving regulators blind to those risks.The tone of lawmakers’ questioning during the three-hour hearing mostly hewed to partisan lines, with Democrats m …
Article Attribution | Read More at Article Source
[mwai_chat context=”Let’s have a discussion about this article:nnIn this articleCJPMFollow your favorite stocksCREATE FREE ACCOUNT(L-R) Brian Moynihan, Chairman and CEO of Bank of America; Jamie Dimon, Chairman and CEO of JPMorgan Chase; and Jane Fraser, CEO of Citigroup; testify during a Senate Banking Committee hearing at the Hart Senate Office Building on December 06, 2023 in Washington, DC. Win Mcnamee | Getty ImagesWall Street CEOs on Wednesday pushed back against proposed regulations aimed at raising the levels of capital they’ll need to hold against future risks.In prepared remarks and responses to lawmakers’ questions during an annual Senate oversight hearing, the CEOs of eight banks sought to raise alarms over the impact of the changes. In July, U.S. regulators unveiled a sweeping set of higher standards governing banks known as the Basel 3 endgame. “The rule would have predictable and harmful outcomes to the economy, markets, business of all sizes and American households,” JPMorgan Chase CEO Jamie Dimon told lawmakers.If unchanged, the regulations would raise capital requirements on the largest banks by about 25%, Dimon claimed.The heads of America’s largest banks, including JPMorgan, Bank of America and Goldman Sachs are seeking to dull the impact of the new rules, which would affect all U.S. banks with at least $100 billion in assets and take until 2028 to be fully phased in. Raising the cost of capital would likely hurt the industry’s profitability and growth prospects.It would also likely help non-bank players including Apollo and Blackstone, which have gained market share in areas banks have receded from because of stricter regulations, including loans for mergers, buyouts and highly indebted corporations.While all the major banks can comply with the rules as currently constructed, it wouldn’t be without losers and winners, the CEOs testified.Those who could be unintentionally harmed by the regulations includes small business owners, mortgage customers, pensions and other investors, as well as rural and low-income customers, according to Dimon and the other executives.”Mortgages and small business loans will be more expensive and harder to access, particularly for low- to moderate-income borrowers,” Dimon said. “Savings for retirement or college will yield lower returns as costs rise for asset managers, money-market funds and pension funds.”With the rise in the cost of capital, government infrastructure projects will be more expensive to finance, making new hospitals, bridges and roads even costlier, Dimon added. Corporate clients will need to pay more to hedge the price of commodities, resulting in higher consumer costs, he said.The changes would “increase the cost of borrowing for farmers in rural communities,” Citigroup CEO Jane Fraser said. “It could impact them in terms of their mortgages, it could impact their credit cards. It could also importantly impact their cost of any borrowing that they do.”Finally, the CEOs warned that by heightening oversight on banks, regulators would push yet more financial activity to non-bank players — sometimes referred to as shadow banks — leaving regulators blind to those risks.The tone of lawmakers’ questioning during the three-hour hearing mostly hewed to partisan lines, with Democrats m …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
