TL;DR: The Megabanks Are Winning the Fight Against Stronger Capital Requirements
- Dimon and McHenry: These two powerful figures, representing JPMorgan Chase and the House Financial Services Committee, respectively, are actively working to weaken proposed capital requirements for large banks.
- Derivative Risk: Megabanks have a history of risky derivative trading, as evidenced by JPMorgan’s $6.2 billion loss in 2012.
- Regulatory Pushback: The Federal Reserve, FDIC, and OCC proposed higher capital requirements in 2023, but faced strong opposition from the megabanks.
- Lobbying Efforts: The megabanks, led by Jamie Dimon, have used lobbying, legal threats, and public relations campaigns to influence regulators and lawmakers.
- Regulatory Capitulation: The Fed has now backed down on its original capital proposal, potentially weakening oversight and increasing the risk of another financial crisis.
- Continued Risk: The megabanks will continue to have significant exposure to derivatives, and the lack of stronger capital requirements could pose a threat to the financial system.
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