New U.S. regulations have big bank CEOs concerned
The heads of Wall Street’s biggest banks used an appearance on Capitol Hill to plead with senators to stop the Biden administration’s proposed changes to how banks are regulated, warning the proposals could negatively impact the economy at a time of geopolitical turmoil and inflation.
Wall Street’s most powerful bankers have regularly appeared in front of Congress going back to the 2008 financial crisis. Among those testifying before the Senate Banking Committee Wednesday include JP Morgan’s Jamie Dimon, Bank of America’s Brian Moynihan, Jane Fraser of Citigroup and Goldman Sachs’ David Solomon.
The banks are adamantly against new regulations proposed by the Biden administration that could hit their profitability hard, including new rules from the U.S. Federal Reserve that would require big banks to hold additional capital on their balance sheets. The industry says the new regulations, known as the Basel Endgame, would curtail lending and weaken bank balance sheets at a time when the industry needs more flexibility.
“Almost every element of the Basel III Endgame proposal would make lending and other financial activities more expensive, especially for smaller companies and consumers,” Fraser said in her prepared remarks.
The other seven CEOs were uniform in their comments in both their prepared remarks and answers to Senators’ questions.
The industry’s opposition has saturated the Washington media market over the last several weeks, which came up in senators’ remarks.
“You should stop pouring money into lobbying against efforts to protect the taxpayers who subsidize your entire industry,” said Sen. Sherrod Brown, the committee chair.
There are also proposals coming from the Consumer Financial Protection Bureau that would rein in overdraft fees, which have also been a longtime source of revenue for the consumer banks.
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