Big bank CEOs to flag economic, regulatory challenges to US house

JP Morgan Chase & Co chief executive Jamie Dimon will warn Congress of economic "storm clouds", while Wells Fargo CEO Charles Scharf will urge patience as the bank addresses longstanding regulatory issues, according to wide-ranging prepared testimony.

In testimony published by the House Financial Services Committee on Tuesday, Scharf said the bank is still at risk for setbacks as it prioritizes fixing a wide-ranging number of regulatory concerns. He noted that while regulatory consent orders have remained in place for too long, it still will be "several years" before everything is addressed.

Dimon, who is due to testify alongside Scharf and other major US bank CEOs at congressional hearings Wednesday and Thursday, will outline the competing forces buffeting the nation's economy. Strong consumer spending and a robust job market suggest resilience, but "storm clouds" like snarled supply chains, the war in Ukraine, high inflation and the Federal Reserve's efforts to contain it all signal tougher times ahead, he added.


He also will argue strict rules that require banks to hold more capital pose a significant economic risk and are "bad for America," and hold back banks' ability to lend. Global regulators imposed stringent capital requirements on banks after the 2008 financial crisis.

Their testimony comes ahead of a pair of oversight hearings for the nation's seven largest retail banks, where CEOs are expected to be grilled on a range of questions, including the economy, consumer issues, and hot-button social issues like fossil fuels and abortion.

A memo prepared by the Financial Services Committee, which will question the CEOs first on Wednesday, noted that so-called megabanks have grown significantly larger after recent mergers. Banking giants continue to pay large fines for "unlawful behavior," the committee said.