Wall Street CEOs say Basel 3 endgame rules will hurt Americans

Wall Street CEOs on Wednesday pushed back against proposed regulations aimed at raising the levels of capital they’ll need to hold against future risks.

In prepared remarks and responses to lawmakers’ questions during an annual Senate oversight hearing, the CEOs of eight banks sought to raise alarms over the impact of the changes. In July, U.S. regulators unveiled a sweeping set of higher standards governing banks known as the Basel 3 endgame.  

“The rule would have predictable and harmful outcomes to the economy, markets, business of all sizes and American households,” JPMorgan Chase CEO Jamie Dimon told lawmakers.

If unchanged, the regulations would raise capital requirements on the largest banks by about 25%, Dimon claimed.

The heads of America’s largest banks, including JPMorgan, Bank of America and Goldman Sachs, are seeking to dull the impact of the new rules, which would affect all U.S. banks with at least $100 billion in assets and take until 2028 to be fully phased in. Raising the cost of capital would likely hurt the industry’s profitability and growth prospects.

It would also likely help nonbank players including Apollo and Blackstone, which have gained market share in areas banks have receded from because of stricter regulations, including loans for mergers, buyouts and highly indebted corporations.

While all the major banks can comply with the rules as currently constructed, it wouldn’t be without losers and winners, the CEOs testified.

Those who could be unintentionally harmed by the regulations include small business owners, mortgage customers, pensions and other investors, as well as rural and low-income customers, according to Dimon and the other…