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JPMorgan Chase’s finance chief has appealed for relief from the slew of new regulations imposed on the US banks, saying that “the time feels right” to start relaxing rules put in place after the global financial crisis.
During a presentation on Tuesday morning, Marianne Lake said that she hoped the new administration of Donald Trump would ease the burden on the big banks, all of which have operated under increasingly tough capital, liquidity and stress-testing requirements since the financial crisis.
Now, she said, the financial system was stable enough to relax some defences, potentially returning more capital to shareholders through higher dividends and share buybacks.
“A lot has been done to improve safety and soundness and confidence in financial markets and financial institutions, a lot of which was necessary,” she said, addressing a roomful of analysts and investors at the bank’s Park Avenue headquarters in New York.
“However, it is perfectly reasonable and rational – and also normal – after many years, and many many new rules and requirements, to pause and step back and take a look at the entirety of them, individually and together.”
Ms Lake, now in her fifth year as chief financial officer of the biggest US bank by assets, said that she wanted more “coherence and co-ordination” between America’s half dozen or so main regulatory agencies, which tend to increase banks’ regulatory burdens by enforcing similar rules in different ways. She also said the US should drop the habit of “gold-plating” global capital standards laid down by the Basel Committee, insisting on extra buffers for the likes of JPMorgan, Citigroup and Bank of America.
“Without a doubt, we do support a robust framework for aggregate capital and liquidity and stress-testing,” she said. “However … the industry has come an extremely long way, and the time does feel right to provide more consistency and flexibility.”