• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Editor's Pick Wall Street CEOs say proposed banking rules will hurt small businesses, low-income Americans
Editor's Pick

Wall Street CEOs say proposed banking rules will hurt small businesses, low-income Americans

by December 7, 2023
by December 7, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Wall Street CEOs on Wednesday pushed back against proposed regulations aimed at raising the levels of capital they’ll need to hold against future risks.

In prepared remarks and responses to lawmakers’ questions during an annual Senate oversight hearing, the CEOs of eight banks sought to raise alarms over the impact of the changes. In July, U.S. regulators unveiled a sweeping set of higher standards governing banks known as the Basel 3 endgame. 

“The rule would have predictable and harmful outcomes to the economy, markets, business of all sizes and American households,” JPMorgan Chase CEO Jamie Dimon told lawmakers.

If unchanged, the regulations would raise capital requirements on the largest banks by about 25%, Dimon claimed.

The heads of America’s largest banks, including JPMorgan, Bank of America and Goldman Sachs, are seeking to dull the impact of the new rules, which would affect all U.S. banks with at least $100 billion in assets and take until 2028 to be fully phased in. Raising the cost of capital would likely hurt the industry’s profitability and growth prospects.

It would also likely help nonbank players including Apollo and Blackstone, which have gained market share in areas banks have receded from because of stricter regulations, including loans for mergers, buyouts and highly indebted corporations.

While all the major banks can comply with the rules as currently constructed, it wouldn’t be without losers and winners, the CEOs testified.

Those who could be unintentionally harmed by the regulations include small business owners, mortgage customers, pensions and other investors, as well as rural and low-income customers, according to Dimon and the other executives.

“Mortgages and small business loans will be more expensive and harder to access, particularly for low- to moderate-income borrowers,” Dimon said. “Savings for retirement or college will yield lower returns as costs rise for asset managers, money-market funds and pension funds.”

With the rise in the cost of capital, government infrastructure projects will be more expensive to finance, making new hospitals, bridges and roads even costlier, Dimon added. Corporate clients will need to pay more to hedge the price of commodities, resulting in higher consumer costs, he said.

The changes would “increase the cost of borrowing for farmers in rural communities,” Citigroup CEO Jane Fraser said. “It could impact them in terms of their mortgages, it could impact their credit cards. It could also importantly impact their cost of any borrowing that they do.”

Finally, the CEOs warned that by heightening oversight on banks, regulators would push yet more financial activity to nonbank players — sometimes referred to as shadow banks — leaving regulators blind to those risks.

The tone of lawmakers’ questioning during the three-hour hearing mostly hewed to partisan lines, with Democrats more skeptical of the executives and Republicans inquiring about potential harms to everyday Americans.

Sen. Sherrod Brown, an Ohio Democrat, opened the event by lambasting banks’ lobbying efforts against the Basel 3 endgame.

“You’re going to say that cracking down on Wall Street is going to hurt working families, you’re really going to claim that?” Brown said. “The economic devastation of 2008 is what hurt working families, the uncertainty and the turmoil from the failure of Silicon Valley Bank hurt working families.”

This post appeared first on NBC NEWS
You Might Also Like
  • The U.S. economy grew at a 3.3% pace in the fourth quarter, much better than expected
  • Drone company’s stock soars after appointing Donald Trump Jr. to advisory board
  • Boeing CEO, other executives stepping down amid safety crisis
  • Stellantis aims to correct ‘arrogant’ mistakes in U.S. market, CEO says
Share
0
FacebookTwitterPinterestWhatsapp

previous post
GOP lawmakers block Biden security aid to Ukraine, Israel and Indo-Pacific, press for more border funding
next post
High Risk of Market Downside in December?

You may also like

As student loan payments loom, borrowers weigh deferrals, ‘debt strikes’...

August 9, 2023

Grubhub to pay $25M to settle charges that it misled...

December 18, 2024

Doritos severs ties with transgender influencer in Spain following online...

March 8, 2024

Here’s who might testify in Sam Bankman-Fried’s fraud trial

October 5, 2023

Trump tariffs, tax cuts and interest rates likely to fuel...

May 2, 2024

More than 200,000 Jeep Cherokee SUVs recalled because they can...

May 18, 2023

Walmart and Target face similar problems — but only one...

August 19, 2023

Netflix announces ‘broad rollout’ of password-sharing crackdown in U.S.

April 19, 2023

What the National Association of Realtors’ settlement means for consumers...

March 21, 2024

Here’s what has driven the Dow rally to 40,000, and...

May 18, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025
    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’ consumer products

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    AMD launches AI chip to rival...

    October 10, 2024

    Here’s how Bed Bath & Beyond’s...

    April 25, 2023

    Disneyland characters and cast members attempt...

    April 19, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here