JPMorgan’s chief executive Jamie Dimon has been a regular, fun-to-watch critic of the recent deluge of regulations on the banking industry.His next victim:
The Volcker Rule, a last-minute addition to the Dodd-Frank bill written by former Federal Reserve Chairman Paul Volcker, was recently approved by the SEC and the Federal Reserve.
The rule imposes restrictions on bank’s trading with their own capital. It also, in it’s current form, restricts banks abilities to make markets, according to Dimon.
Dimon, who admits he hasn’t read all of the new rules, said he understands that regulators want to curb proprietary trading. But from what he’s heard about it, it sounds like the Volcker Rule might do more damage than good.
In other words, get ready, Volcker Rule. You just made a new enemy. Dimon is going to read you, and if you try to impose the regulations he thinks you want to impose, he will whittle you down to a shadow of your former self.
Here’s why —
“The United States has the best, deepest, widest, most transparent capital markets in the world which give you, the investor, the ability to buy and sell large amounts at very cheap prices.”
“I wish Paul Volcker understood that,” Dimon said on yesterday’s earnings conference call, “Now we understand why there is no proprietary trading. That was fine. And these are like — I haven’t read them all yet — like 178 rules or reporting and compliance around what is proper market-making. We have to be in a position to do proper market-making for our clients…”
“Most of our business is market-making. … I hope all of you on this phone understand how important this is, not just for your own business but for future of the United States. And we hope at the end of the day we will be able to make markets freely. If American companies are put at huge disadvantage, the foreign companies — this is just — we were told everyone is going to adopt this, which we know is not true. So now it would be even a bigger deal.”
“There’s going to be commentary — commentary will come from the public.” he said. “We will give our comments to regulators.”
But of course, he said – JPMorgan will want to be prepared for the Volcker Rule implementation.
“We will do the best job we can to get ready for those requirements.”
During the last year, Dimon has voiced his concerns saying the Basel group global banking regulations “anti-American” and calling out Federal Reserve Chairman Ben Bernanke with pointed questions regarding the Dodd-Frank Financial Regulatory Reform bill.
Fun fact: in response to Jamie Dimon’s above comments, a rival banker wrote to POLITICO, “Amen.”