Money Control Place
  • Politics
  • Business
  • Stocks
  • Investing
  • Politics
  • Business
  • Stocks
  • Investing

Money Control Place

Business

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

by December 7, 2023
December 7, 2023
Wall Street CEOs say proposed banking rules will hurt small businesses, low-income Americans

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
0
FacebookTwitterGoogle +Pinterest
previous post
High Risk of Market Downside in December?
next post
International Lithium: PEA for the Raleigh Lake Lithium Project Outlines Highly Favourable After-Tax NPVof CAD$342.9 million and After-Tax IRR of 44.3% P.A.

Related Posts

Titanic submersible lost at sea raises legal questions...

June 22, 2023

Paris seeing signs of strong travel demand ahead...

June 24, 2024

Charlie Munger, investing genius and Warren Buffett’s right-hand...

November 29, 2023

Bucking trend, McDonald’s vows no egg surcharges as...

February 27, 2025

Trump Media sues Brazil Supreme Court judge who...

February 20, 2025

Frustrated pharmacists could go on strike in rare...

October 29, 2023

Federal Reserve official agrees the central bank can...

September 6, 2023

Soaring egg prices are threatening a classic holiday...

March 1, 2025

Walmart to pay $10 million to settle lawsuit...

June 24, 2025

23andMe to delist from Nasdaq, deregister with SEC

May 29, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free


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

    Latest

    • S&P 500 Breaking Out Again: What This Means for Your Portfolio

    • Altech Batteries LtdCERENERGY Battery Prototype Reaches Key Milestones

    • Canada’s First Set of Nation-Building Projects Paves Way for Mining, Energy Operations

    • WPIC: Platinum to Hit Third Annual Deficit as Supply Fails to Meet Demand

    • Stallion Uranium Announces Grant of Options

    • Homerun Resources Inc. Signs Binding LOI for the Acquisition of Additional Mineral Rights in the Santa Maria Eterna Silica Sand District

    Categories

    • Business (1,372)
    • Investing (2,892)
    • Politics (3,699)
    • Stocks (1,787)
    • Uncategorized (20)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: MoneyControlPlace.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 © 2025 moneycontrolplace.com | All Rights Reserved