I hate to be in the position of supporting big banks, but here I am.
Feeling empowered, the global regulators (the Basel group) are stepping all over the U.S. banking industry. It’s not enough that our own government and the ACORN-loving followers everywhere are doing it.
The CEO of JP Morgan Chase, Jamie Dimon, is encouraging banks to consider pulling out of the Basel group. Dimon, if you remember, was supportive of banks having more capital, but now it’s gone so far overboard that it’s treating U.S. banks unfairly.
Dimon said, “Our regulators should go there and say: ‘If it’s not in the interests of the U.S., we’re not doing it…I think any American president, secretary of Treasury, regulator or other leader would want strong, healthy global financial firms and not think that somehow we should give up that position in the world and that would be good for your country.”
Does that surprise anyone given the administration’s views on globalization and given their anti-private business policies and regulations? The combination of Dodd-Frank and Basel is highly injurious to our U.S. banking industry. It’s like having two Dodd-Frank bills as if the original isn’t bad enough.
Basel’s rules are to increase bank financial safety by requiring them to build up “tier one” capital to 7% of “risk-weighted assets,” but JP Morgan has to reach 9.5%. The liquidity rules are another point of contention. Regulators view bonds as liquid, but turn around and discount government-backed, mortgage-backed securities in the U.S. Sound a bit anti-private business to anyone?
The threat of course is that Asian banks (especially) will take the U.S. market share. Read here: Reuters