JPMorgan CEO Dimon warns Congress of economic “storm clouds”

Mr. Dimon, who is expected to testify alongside CEOs of major US banks at Congressional hearings on Wednesday and Thursday, will outline the competing forces that are shaking the country’s economy. Strong consumer spending and a solid labor market suggest resilience, but stalled supply chains, the war in Ukraine, high inflation and the Federal Reserve’s efforts to contain it point to more difficult times ahead.

“As these storm clouds accumulate on the horizon, even the brightest economists are divided over whether these clouds could evolve into a major economic storm or something much less severe,” Dimon’s testimony reads.

He also said that strict rules that force banks to hold more capital pose a significant economic risk, hindering banks’ ability to lend.

“It’s bad for America because it paralyzes regulated banks at just the wrong time, forcing them to be capital constrained and limiting growth in areas like lending as the country enters tough economic conditions,” he warned.

Global regulators imposed stringent capital requirements on banks after the 2008 financial crisis.

Dimon’s testimony precedes a couple of surveillance hearings for the nation’s seven largest retail banks, in which CEOs should be questioned on a range of issues including the economy, consumer issues, and burning social issues. like fossil fuels and abortion.

A note prepared by the House Financial Services Commission, which will interview CEOs first on Wednesday, notes that so-called megabanks have grown significantly in size following the recent mergers. The banking giants continue to pay heavy fines for “illegal behavior,” according to the commission.

According to the note, the hearing will seek testimony from CEOs on a range of issues, including consumer protection, compliance issues, diversity and “public concern issues” such as workers’ rights and the environment. , access to abortion.

Mr. Dimon defended his bank’s work, stating that the largest bank in the country plays a vital role in the economy, especially during tumultuous times like the pandemic, when it was the largest lender under the salary protection program. .

“It also showed what large companies the size and reach of JPMorgan Chase can do as a source of strength for the economy,” said his testimony.

Among the CEOs who testified were the heads of the four largest US banks: JPMorgan’s Dimon, Bank of America’s Brian Moynihan, Citi’s Jane Fraser, and Wells Fargo’s Charles Scharf. They will be joined by Andy Cecere, CEO of US Bancorp, William Demchak, CEO of PNC Financial, and William Rogers, CEO of Truist Financial, who manage the country’s largest regional creditors.

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