Whether or not laws were broken in the lead up to the 2008 financial crisis, the lack of discipline and inadequate controls around many lending and risk taking practices certainly merit some version of the vigorous rethink of the regulatory apparatus that is now in process. That said, however, it’s still possible to feel Jamie Dimon’s pain as he vented his frustration over new regulatory proposals at Mark Carney, Bank of Canada governor – while perhaps not always loving his tonality.
As the chief executive of JPMorgan, Mr Dimon presides over a bank that both emerged least scathed from the meltdown and arguably conducted itself more responsibly than most of its peers. For its trouble, JPMorgan is now at the short end of the stick: potentially penalised for being American and penalised again by elements of the proposed Basel III rules. That may be unfair but it’s not totally surprising. As New York was at the epicentre of the debacle, it’s only logical that Washington would take a stronger hand in reworking the rules and the oversight.
Yet what is much more urgently needed – but sadly nowhere on the horizon – is a comprehensive, worldwide system of regulation and supervision for a financial system that constitutes a sort of global circulatory system. While Mr Dimon may not agree with all the rules that would emerge from such an arrangement, at least all lenders would be competing on a level playing field. Continue reading »