NEW YORK (AP) — The heads of Wall Street’s biggest banks used an appearance on Capitol Hill on Wednesday to plead with senators to stop the Biden administration’s proposed changes to how banks are regulated, warning that the new proposals could negatively impact the economy at a time of geopolitical turmoil and inflation.
Wall Street’s most powerful bankers have regularly appeared in front of Congress going back to the 2008 financial crisis. Among those testifying before the Senate Banking Committee included JPMorgan’s Jamie Dimon, Bank of America’s Brian Moynihan, Jane Fraser of Citigroup and Goldman Sachs’ David Solomon.
Whereas in previous years the bank CEOs used the hearing to highlight the industry’s good deeds, this year they warned about the potential dangers of over-regulating the industry.
The banks are adamantly against a number of proposed regulations that could hit their profitability, including new rules from the Federal Reserve that would require big banks to hold additional capital on their balance sheets. The industry says the new regulations, known as the Basel Endgame, would curtail lending and weaken bank balance sheets at a time when the industry needs more flexibility.
There are also proposals coming from the Consumer Financial Protection Bureau that would rein in overdraft fees, which have also been a longtime source of revenue for the consumer banks.
“I’ve been at this for a long time. I’ve sat on the board of the New York Federal Reserve. I’ve seen a lot of rules, and (this proposal) just doesn’t make sense,” said James Gorman, CEO of Morgan Stanley, in response to a question.
The other seven CEOs were uniform in their comments in both their prepared remarks and answers to Senators’ questions.
“(The regulations) were not thoughtfully done and should be relooked at,” Dimon said.
The industry’s opposition has saturated the Washington media market over the last several weeks, which came up in senators’ remarks during the hearing.
“You should stop pouring money into lobbying against efforts to protect the taxpayers who subsidize your entire industry,” said Sen. Sherrod Brown, D-Ohio.