Wall Street bankers expect President-elect Donald Trump to scale back regulations when he returns to the White House. And JPMorgan $JPM Chase (JPM) chief Jamie Dimon says banking executives couldn’t be happier.
Wall Street is expecting a more friendly, deregulatory environment under Trump
Wall Street bankers expect President-elect Donald Trump to scale back regulations when he returns to the White House. And JPMorgan $JPM Chase (JPM) chief Jamie Dimon says banking executives couldn’t be happier.
Regardless of who they voted for, “a lot of bankers, they’re like dancing in the street,” Dimon said Thursday at the APEC CEO Summit in Lima, Peru. “They’ve had successive years and years of regulations, a lot of which stymied credit.”
“You could have kept the banks equally safe but had them do more credit,” he added.
Dimon, who leads the largest U.S. bank by assets, pointed to the off-balance loan-to-deposit ratio as one problem area: Banks used to hold $100 of deposits for every $100 they lend out, but now allows banks to lend just $65 for every $100 of deposits.
Wells Fargo $WFC (WFC) analyst Mike Mayo said in a research note last week that Trump’s win will be a “regulatory game changer” for the banking sector. The new Trump administration could mean “more free markets, less harsh oversight,” and reduced regulatory risk, Mayo wrote.
A more deregulatory and business-friendly approach under Trump is expected to spur investment and other banking activities, such as mergers and acquisitions.
Trump eased regulations in the banking sector during his first term. In 2018, the he signed legislation that raised the threshold for banks to be deemed too important to the financial system to fail, from $50 billion in assets to $250 billion. That meant that more small- and medium-sized institutions no longer had to undergo stress tests or submit “living wills” — contingency plans outlining how financial institutions would manage a bankruptcy or other failures.
Excessive regulation in the U.S. is “a shame, and we’re doing this to ourselves, and it’s a mistake,” Dimon said. “I applaud any government that says, ‘I’m going to make government more efficient.’”
Trump has tapped Tesla $TSLA (TSLA) and SpaceX CEO Elon Musk and Vivek Ramaswamy to head a so-called “Department of Government Efficiency” (DOGE) — a non-government task force aimed at reducing government spending and bureaucracy.
On Thursday, Trump said in a post on his social media platform Truth Social that while he respects Dimon, he would not invite the 68-year-old executive to be a part of his administration.
And while Dimon has repeatedly said he’s not looking to leave the job he’s held for almost 20 years, he thanked the president-elect for the message.
“I wish the president well and think it’s a very nice note,” Dimon said. “But, I just want to tell the President also I haven’t had a boss in 25 years, I’m not about ready to start.”
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