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Jamie Dimon rips Fed stress test as ‘bad way to run’ financial system

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Jamie Dimon, CEO of JP Morgan Chase, speaks at the Business Roundtable Executive Innovation Summit in Washington, DC on December 6, 2018.

Janvhi Bhojwani | CNBC

JPMorgan Chase CEO Jamie Dimon did not say anything when it came to the regulatory process that forced his bank to suspend its share buybacks.

Asked by veteran banking analyst Betsy Graseck of Morgan Stanley On Thursday about the Federal Reserve’s recent stress test, Dimon delivered a series of criticisms of the annual exercise, conducted after the 2008 financial crisis that nearly capsized the economy. world economy.

“We don’t agree with the stress test,” says Dimon. “It’s inconsistent. It’s not transparent. It’s too volatile. It’s essentially capricious, arbitrary.”

JPMorgan, America’s largest bank by assets, is trying to generate more capital to help it comply with the results of the Fed’s tests. Last month, steadily increasing capital requirements in the trial affected the largest global financial institutions, forcing the New York-based bank to freeze its dividends. While Citigroup made a similar announcement, opponents included Goldman Sachs and Wells Fargo promote investor payments.

Under the exam’s hypothetical scenario, JPMorgan expects to lose about $44 billion as the market crashes and unemployment soars, Dimon said. He essentially called that number a bunk on Thursday, asserting that his bank will continue to make money during the downturn.

After JPMorgan announced the results of the second quarter, it revealed a host of other measures it is taking on stack capital, including a halt to share buybacks. That move, in particular, was not welcomed by investors because the stock hasn’t been that cheap in years.

Shares of the bank fell nearly 5%, hitting a 52-week low.

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Teja
Teja
I am passionate about journalism and using new technology to spread news. I am also interested in politics and economics, and I am always looking for ways to make a difference in the world. I am the CEO of Janaseva News, and I am 24 years old.

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