Market Overview

Is The Banking System Any Safer? JPMorgan Chase CEO Jamie Dimon Weighs In

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Or are we worse off than we were before?

Jamie Dimon, the CEO of JPMorgan Chase & Co. (NYSE: JPM), shared his thoughts with FT.com this week.

“SIVs [structured investment vehicles] are gone, repos [repurchase agreements] are more conservative, mortgage underwriting is more conservative, CDOs [collateralised debt obligations] are largely gone, subprime [mortgages] is nearly gone, alt-A [mortgages] is gone, funds are less leveraged, money market funds are more conservative, companies are more conservative, companies are pre-funding longer, there's a lot more capital in the system, there's a lot more liquidity in the system, and all this has already happened before Dodd-Frank and other regulation,” Dimon said.

In another feature on FT.com, Dimon criticized the Basel III capital rules, which were supposedly designed to make the financial system safer.

“I'm very close to thinking the United States shouldn't be in Basel any more,” he said. “I would not have agreed to rules that are blatantly anti-American. Our regulators should go there and say: ‘If it's not in the interests of the United States, we're not doing it.'”

With regard to banks trading at a discount to book value, Dimon said that uncertainty and litigation are the cause.

“What you are seeing is huge economic uncertainty,” he said. “Huge amounts of litigation. You see huge uncertainty about regulations. You see a lot of still antibank sentiment, antibank taxes. But I do think [a lot of the issues] will eventually disappear.”

Follow me @LouisBedigian

 

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