JPMorgan CEO Dimon warns Dodd-Frank will impose costs, require substantial resources

Jamie Dimon

Jamie Dimon, the CEO of JPMorgan Chase & Co., issued a letter to shareholders in the bank’s 2011 annual report saying that new regulatory requirements in the upcoming year will be costly and require substantial resources.

“As a result of the Dodd-Frank, we now have multiple regulatory agencies with overlapping rules and oversight responsibilities. A robust financial system needs coordinated and consistent regulation that is strong, simple and transparent,” Dimon said. “The regulators should have clear authority and responsibility.”

Dimon also warned of the new regulatory requirements, including increased capital rules, the Volcker Rule’s ban on proprietary trading and the international Basel risk weight standards.

“These new rules will affect virtually every legal entity, system (we have 8,000 of these), banker and client around the world,” Dimon said. “It will take an enormous amount of resources across all of our disciplines—people, systems, technology and control functions…to get it done right.”

Dimon said that the new regulatory requirements may cause operational issues for the company, leading to increased bureaucracy and unnecessary costs.

“For example, different regulators have asked for different reports on some very complex issues such as global liquidity,” Dimon said. “We are going to try to build one report that meets all of their needs…as opposed to preparing three completely different liquidity reports every day or every month. Three reports lead to more mistakes, less understanding and more work.”

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