One of the pleasures of every JPMorgan quarterly earnings call is hearing Jamie Dimon’s, and now Marianne Lake’s, authoritative-sounding pronouncements on proposed regulations. You sometimes get the sense that regulations can’t be adopted without Dimon’s approval, so his views on these calls provide some sort of indicator of which of the proposals might actually happen. Plus, general amusing orneriness.
So how’d everyone do? Well, they think Nouveau Glass-Steagall is pretty silly, for one thing: in response to an analyst question about it, Lake said “we don’t spend much time thinking about it.”1 Oof! Get outta here with your Glass-Steagalls.
But the theme of the call was mostly “could you tell us more about your leverage ratio?” Here, JPMorgan is not so fond of the new Basel III leverage ratio proposals. The earnings deck walks through how JPMorgan will comply with the new U.S. leverage ratio rules, but it does not do any math on the effects of the new Basel proposals to do creepy things like disallow derivatives collateral netting. When asked to quantify the leverage under those proposals, Lake and Dimon declined, saying that there are “fundamental problems” with those proposals. So they have chosen to ignore them and, presumably, they will go away. Read more »