Michael Gibson, senior associate director of the Federal Reserve, told the Senate Agriculture Committee today that global regulators should harmonize rules on derivatives to prevent financial risks from migrating to the least-supervised economies. Treasury Secretary Timothy F. Geithner said earlier this month that he favored having global authorities agree on a minimum level of regulation to avoid a "race to the bottom" among countries.
The U.S. Commodity Futures Trading Commission, required by the Dodd-Frank Act to write new regulations for the $601 trillion over-the-counter swaps market, may enter agreements with foreign officials to recognize comparable rules, Gary Gensler, CFTC chairman, told the Agriculture Committee today.
Dimon, who's also chairman of New York-based JPMorgan, questioned Bernanke at a June 7 conference of bankers in Atlanta on whether regulators have gone too far in reining in the banking system and are slowing economic growth. The U.S. unemployment rate rose to 9.1 percent in May as the S&P/Case- Shiller index of property values in 20 cities showed that home prices slumped in March to their lowest since 2003.
"I have a great fear someone's going to try to write a book in 20 years, and the book is going to talk about all the things that we did in the middle of the crisis to actually slow down recovery," Dimon, 55, told the Fed chairman.
Proposed global capital standards would impose a 3 percent surcharge on top of a 7 percent minimum requirement on the largest systemically important financial institutions, or SIFIs. The rules are being drafted by a group of bank regulators who are scheduled to decide on a preliminary plan this month and present a final proposal to the G-20 group of nations in July.