WASHINGTON (Reuters) – Wall Street bank bosses warned lawmakers on the Senate Banking Committee on Wednesday that capital hikes and other new regulations being contemplated by U.S. bank regulators will hurt lending, capital markets and the broader economy.
Some Democratic lawmakers, meanwhile, hit back at the industry, accusing banks of overstating the risks to the economy and overly aggressive lobbying to water down the rules.
The hearing also explored the resilience of the banking system following three bank failures earlier this year, the economic outlook, and worker rights.
Here are some key quotes from the hearing:
Democratic Senator Sherrod Brown, chair of the Senate Banking Committee:
“Anyone who had any doubt whether Wall Street could be trusted to use its power responsibly need only to look at the current lobbying fight on this … You have even gone national: pouring money into ads for Sunday Night Football. It is a campaign waged by your lobbyists to prevent financial watchdogs from putting in place capital requirements to protect our banking system and our economy.
“That’s why people hate Wall Street. That’s why people hate Washington because these lobbying campaigns that you engage in usually work.”
Jamie Dimon, chief executive of JPMorgan Chase:
“The debate should not only be about more or less regulation, but about the right regulation to keep the American banking system the best in the world. I urge lawmakers and regulators to be thoughtful about the effect of arbitrary and unstudied regulatory proposals and their cumulative impact on the economy.”
Jane Fraser, CEO of Citigroup:
“Although we certainly don’t see a drastic downturn on the horizon, history suggests a recession is possible, given the macroeconomic factors at play.
“We also are beginning to see some concerning signs in the lower-FICO score segment of our customers. This is unfortunately the same group that feels any tightening of credit first.”
David Solomon, CEO of Goldman Sachs on Basel capital rule:
“It would quadruple our capital requirements for clean energy tax equity projects and would increase our capital eight times for important transactions that we enter into with pension funds to improve their returns for retirees.”
(Reporting by Chibuike Oguh, Pete Schroeder, Lananh Nguyen, and Michelle Price; Editing by Nick Zieminski)
