Jamie Dimon on a Confrontational Course: Banks Resist New Waves of Regulation

Sixteen years after the 2008 rescue operation, in which Jamie Dimon and other top bankers reluctantly agreed in Washington to accept up to $250 billion in federal capital to stabilize the global banking system, Dimon is now striking a new tone. He is currently urging the banking world to resist the ongoing flood of new banking regulations. His emphatic call 'It’s time to stand up' was loudly expressed at a conference of the American Bankers Association in Washington. Dimon is not alone in his assessment. Bankers worldwide are advocating for a halt to and even the rollback of some of the regulations introduced since 2008. There are plenty of reasons for this: the memory of the financial crisis is fading, banks have successfully managed both the COVID-19 pandemic and the financial chaos in March 2023, when some regional US banks failed and Credit Suisse had to be rescued by UBS. Competition for banks from private lenders and investment firms is on the rise. This was originally an intention of regulators, to shift risky activities to less harmful realms. However, regulators are changing their focus. The Bank of England is currently simulating shock scenarios to analyze their impacts on the entire market. Another point is the changing attitude of politics, which now considers the balance between regulation and growth more strongly. Consequently, regulators are losing support, and their measures sometimes appear disproportionate in the international context. Political sympathy for stricter rules is dwindling, as evidenced by the recent argumentative victories of the American banking lobby against the 'Basel Endgame' rules. However, the regulatory framework remains fragile. There is no consensus on Basel III among US regulators, and alternative political scenarios could lead to further relaxations. Against this backdrop, experts warn of the dangers of a non-uniform global standard. International fiscal stability still requires stringent oversight mechanisms, warns the chairman of the Basel Committee on Banking Supervision. The IMF also points to the insufficient buffers in the banking system in the face of global uncertainties. The aftermath of the 2008 financial crisis is far from forgotten, and some measures remain incomplete or ineffective. Nevertheless, there is no desire among major banks to completely dismantle the established regulatory wall, as it also serves as a shield against emerging fintech providers. Ultimately, it becomes clear: financial stability remains a fundamental prerequisite for successful economic policy, a lesson that regulatory authorities must not lose sight of.