Bank executives warn lawmakers of lending risk among nonbanks – Roll Call - 24line

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الأربعاء، 21 سبتمبر 2022

Bank executives warn lawmakers of lending risk among nonbanks – Roll Call

Executives said higher capital requirements would raise the cost of lending and lower the capital available in the real economy.

“Liquidity requirements, international requirements, Basel requirements, etc., do restrict lending, raise the cost of lending, damage markets a little bit, reduce mortgage lending at some of our banks,” Dimon said. “Unfortunately, some of that’s going to happen when things get worse. So JPMorgan will be sitting with a trillion dollars unable to be deployed to help our clients, to intermediate markets at precisely the wrong time.”

‘If they’re working, they’ll be fine’

The executives said consumers have so far weathered rising prices and are well-positioned heading into a possible recession, as the Fed raises interest rates to rein in inflation. However, how consumers fare would depend on the length and severity of a rescission, they said. 

The Fed raised its funds rate by another 75 basis points Wednesday, its third straight increase of that size. Last month, the consumer price index measured an annual inflation rate of 8.3 percent, according to the Bureau of Labor Statistics. 

Andy Cecere, CEO of U.S. Bancorp, said consumers are adjusting their spending habits to higher prices.

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