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US banks are “in the early stages” and the “animal feed is alive”, according to a senior JPMorgan Chase executive, as Wall Street bets that a looser regulatory regime under President Donald Trump will spur deal-making at the world’s biggest bank. economy.
Speaking at the World Economic Forum in Davos on Tuesday, Mary Erdoes, the Wall Street lender’s head of asset and wealth management, said she was “hopeful” that Trump’s regulatory approach would encourage the US economyreversing some of the burden that the Joe Biden administration placed on the banking industry.
“If you look at the last administration and the number of new, significant regulations, it’s eight times the number of significant new regulations compared to the previous Trump administration,” said Erdoes, who is seen as a candidate to succeed Jamie Dimon at JPMorgan.
“With that comes several million man-hours of paperwork. work. . . which clogs up the system and prevents the economy from continuing to have that very healthy flywheel. So we’re really looking forward to that.”
Erdoes’ comments come as banking executives in Europe worry that the softer regulatory approach favored by Trump could put European banks at a disadvantage if regulators on the continent demand stricter application of rules such as Basel 3.1.
Speaking on the same panel on Tuesday, Standard Chartered chief executive Bill Winters said it was important the rules were “consistently set globally, so we don’t have this arbitrage from market to market”.
While Europe may find it difficult to deviate from certain regulations, the UK may lean heavily towards the US system, according to one senior banking executive.
“The UK Government will be at the forefront of deregulation,” the executive said. “They have delayed the implementation of Basel III to see how and if it will be implemented in the US.”
Meanwhile, JPMorgan’s Erdoes said looser regulations in the US could result in more jobs and more companies going public. “Companies don’t want to go public or can’t go public because of the heavy regulatory burden and we hope you’ll see that [change]”, she said.
She added that JPMorgan had set up a “war room” to analyze and evaluate Trump’s overnight executive orders and praised the US president’s decision to ban telecommuting for federal employees. This month, JPMorgan said it would require all staff to return to the office five days a week from March.
“Time will tell, but a lot of it is exactly what you would do if you had a very business environment,” Erdoes said. “Thank God the U.S. government did that and hopefully that will put us ahead of other governments in the world so we can continue to compete.”
