Financial regulations will increase customer costs, JPMorgan’s CEO claims

16 September 2010

The introduction of new regulations to the financial services industry will lead to increased costs for banking customers, JPMorgan’s chief executive officer has claimed.

Jamie Dimon made the comments during a financial services conference in New York organised by Barclays.

He told investors gathered at the event that customer costs will go up as returns for banks are due to fall because of stricter liquidity requirements brought in via Basel III capital regulations.

Additionally, banks will experience further difficulties due to the requirements of the Dodd-Frank act, which requires certain financial institutions to set up separate units for their derivative operations, the CEO explained.

Mr Dimon was quoted by the Financial Times as telling the conference: “It is a real pain. It is an operational nightmare. It is highly ill-conceived, doesn’t reduce risk at all. As a matter of fact, it probably complicates it for some [customers].”

However, despite these issues, the banking head added that he was broadly in favour of the overhaul of the regulations for the financial services industry as well as hoping JPMorgan will see a rise in dividends during the early stages of next year.

During August, JPMorgan unveiled plans to shut its proprietary trading desk as part of a wider strategy to comply with new rules restricting speculative investments from banks when using their own capital.

By Jim Ottewill

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