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WASHINGTON (Reuters) – JPMorgan Chase & Co (NYSE:JPM) Chief Executive Jamie Dimon plans to tell Congress that the U.S. economy faces “storm clouds,” according to prepared testimony.
Dimon, who is due to testify alongside major U.S. bank CEOs at congressional hearings Wednesday and Thursday, will outline the competing forces buffeting the nation’s economy. Strong consumer spending and a robust job market suggest resilience, but snarled supply chains, the war in Ukraine, high inflation and the Federal Reserve’s efforts to contain it all signal tougher times ahead, he added.
“While these storm clouds build on the horizon, even the best and brightest economists are split as to whether these could evolve into a major economic storm or something much less severe,” Dimon’s testimony states.
He also said strict rules that require banks to hold more capital pose a significant economic risk, holding back banks’ ability to lend.
“This is bad for America, as it handicaps regulated banks at precisely the wrong time, causing them to be capital constrained and reduce growth in areas like lending, as the country enters difficult economic conditions,” he warned.
Global regulators imposed stringent capital requirements on banks after the 2008 financial crisis.
Dimon’s testimony comes ahead of a pair of oversight hearings for the nation’s seven largest retail banks, where CEOs are expected to be grilled on a range of questions, including the economy, consumer issues, and hot-button social issues like fossil fuels and abortion.
A memo prepared by the House Financial Services Committee, which will question the CEOs first on Wednesday, noted that so-called megabanks have grown significantly larger after recent mergers. Banking giants continue to pay large fines for “unlawful behavior,” the committee said.
The hearing will seek CEO testimony on a range of issues, including consumer protection, compliance issues, diversity and “issues relating to the public interest” such as worker rights and abortion access, according to the memo.
Dimon defended his bank’s work, arguing the nation’s largest bank plays a critical role in the economy, particularly during tumultuous times like the pandemic, when it was the largest lender under the Paycheck Protection Program.
“It has also shown what great companies with the size and scale of JPMorgan Chase can do as a source of strength for the economy,” his testimony states.
The CEOs testifying include the heads of the four largest U.S. banks: JPMorgan’s Dimon, Bank of America (NYSE:BAC)’s Brian Moynihan, Citi’s Jane Fraser and Wells Fargo (NYSE:WFC)’s Charles Scharf. They will be joined by US Bancorp (NYSE:USB) CEO Andy Cecere, PNC Financial (NYSE:PNC) CEO William Demchak, and Truist Financial (NYSE:TFC) CEO William Rogers (NYSE:ROG), who run the country’s largest regional lenders.
