Dimon says private equity giants are 'dancing in the streets' as regulators tighten bank oversight

JPMorgan Chase executives warned Friday that tougher regulations successful the aftermath of a trio of slope failures this twelvemonth would rise costs for consumers and businesses, portion forcing lenders to exit immoderate businesses entirely.

When asked by Wells Fargo expert Mike Mayo astir the interaction of changes projected by Federal Reserve Vice Chair for Supervision Michael Barr successful a speech earlier this week, JPMorgan CEO Jamie Dimon said that different fiscal players could extremity up winners.

"This is large quality for hedge funds, backstage equity, backstage credit, Apollo, Blackstone," Dimon said, naming 2 of the largest backstage equity players. "They're dancing successful the streets."

Blackstone and Apollo didn't instantly respond to requests for remark connected Dimon's remarks.

Banks look requirements to clasp much superior arsenic a cushion against risky activities from some U.S. and planetary regulators. Authorities are proposing higher superior requirements for banks with astatine slightest $100 cardinal successful assets aft the sudden collapse of Silicon Valley Bank successful March. But that besides coincides with a long-awaited acceptable of planetary rules spurred by the 2008 fiscal situation referred to arsenic the Basel III endgame.

"How overmuch concern leaves JPMorgan oregon the manufacture if superior ratios spell up arsenic overmuch arsenic perchance proposed?" Mayo asked.

CFO Jeremy Barnum said that banks would rise prices connected extremity users of loans and different products earlier yet deciding to permission immoderate areas entirely.

"To the grade we person pricing powerfulness and the higher superior requirements means that we're not generating the close instrumentality for shareholders, we volition effort to reprice and spot however that sticks," Barnum said.

"If the repricing is not successful, past successful immoderate cases, we volition person to remix and that means getting retired of definite products and services," helium said. "That astir apt means that those products and services permission the regulated perimeter and spell elsewhere."

After the 2008 fiscal crisis, heightened rules forced banks to propulsion backmost from activities including mortgages and pupil loans. For corporations and organization players, acquisitions and different immense loans are present increasingly funded by backstage equity players similar Blackstone and Apollo.

That has contributed to the emergence of non-bank players, sometimes referred to arsenic the "shadow banking" industry, which has acrophobic immoderate fiscal experts due to the fact that they mostly look little national scrutiny than banks.