Banking Executives on Wall Street Expected to Alert Congress that New Regulations Will Have Negative Impact on Economy

CEOs of major banks, including JPMorgan, Morgan Stanley, and Goldman Sachs, are set to warn lawmakers about the potential negative impact of proposed capital hikes and new banking regulations on the credit markets and the broader economy. They will appear before the Senate Banking Committee on Wednesday to discuss various key issues, including worker pay and rights, mortgages, financial stability, and the economy.

The CEOs are particularly concerned about the “Basel Endgame” proposal, which aims to revamp how banks calculate their loss-absorbing capital, as well as other regulations related to fair lending and fee caps. They believe that these regulations could hinder lending, negatively affecting small businesses and consumers.

Jamie Dimon, CEO of JPMorgan, will express his concerns about these proposed regulations during his testimony. He will argue that the Basel rule could lead to banks discontinuing certain products and services or increasing the cost of these offerings. Other CEOs scheduled to appear include Bank of America’s Brian Moynihan, Wells Fargo’s Charles Scharf, Goldman Sachs’ David Solomon, Morgan Stanley’s James Gorman, State Street’s Ronald O’Hanley, and BNY Mellon’s Robin Vince.

While regulators argue that these new rules, including capital hikes, are necessary to protect the banking system, the CEOs will seek to convince lawmakers, especially moderate Democrats, that the proposed regulations could harm the banking sector and the economy at large.

It’s not the first time big bank CEOs have appeared before Congress, as they have been doing so for several years following the 2007-09 financial crisis and subsequent scandals. While these hearings often do not lead to immediate legislation, they have prompted banks to make changes in the past.