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- Federal Reserve cannot allow the capture of the Treasury market As in 2008, JPMorgan CEO Jamie Dimon, a reason for a certain reason to determine the requirements of the banking capital. These rules will allow the relay of a global financial crisis, but the native financial crisis, but the Treasury Secretary Scott Bessent, Fed President Jerome Powell and many economists will allow banking and brokerage dealers to step into the economists and agree to many economists.
Bond market sell Asked investors safe shelter status To be afraid of US debt and another credit crisis– Liquidity dry and economic activity is stopped. JPMORGAN CHASE CEO Jamie Dimon said that the world’s biggest lender can help, but if rule Developed to prevent the repetition of the global financial crisis.
Treasury Secretary Scott Bessent, the Federal Chair Jerome Powell and many economists agree that certain changes can help more than the bank and brokerage dealers in the market stress. Dimon went further but called sweeping reform Capital requirementsThe industry has consumer loans that arguing for a long time and seriousness. The existing frame, he said he contains deeper defects.
“Do not forget that these banks are not comfortable,” he said. Dimon said in the first quarter of JPMorgan the call of earnings Friday. “It’s comfort to the markets.”
Capital requirements, especially if they continue serious losses, especially aimed at providing “very large” banks. Jpmorgan was one of the controversial number of borrowing government In 2008, Dimon, already the treasury secretary took the lemon money with the insistence of Henry Paulson.
The treasury market is closely monitoring the global economy and the Wall Street is closely monitoring the Fed’s signs can be forced to intervene. Many suspects bond market Turmoil is really what the President has announced a 90-day break to sweep the Donald Trump “Reciprocal tariffs“But the fixed income festival does not end. A confusion In the productivity such as the fall of bond prices, the investors insisted on the world’s safest assets for a long time.
Trump management clarified a lower productivity of benchmark for the prices of the 10-year treasury, mortgage loans, car loans and other general debts in the economy. This is 4.59% on Friday, but started on Monday that more than 30 points and more than 70 points from Wednesday.
“Textbook, when the stock exchange has fallen, long-term interest rates must fall,” Torsten Sløk, Chief Economist at Private Capital Giant Apollo, A note Friday. “But this is not the thing that happened at the moment.”
Why do banks fail to step
Like Sløk, one of the sinners for this “mystery of the murder” Fortune It can be the so-called the beginning of this week “main trade“Hedgehogs are often borrowed in the amount of treasures and futures related to these bonds, these bonds are affordable, and in turn, help save money markets.
During periods excessive variationHowever, hedging funds can be forced awkward If the market struggles for mass growth in the supply of treasures, it is $ 800 billion in trade. Foreign sales may aggravate the problem and emerged in the play The dollar fell on Thursday and Friday.
Large banks and broker-dealers, however, cannot take steps due to restrictions such as extra goal ratio. As the name intended, this measure may use the amount of borrowers to invest.
“These restrictions, of course, be stronger after the financial crisis in 2008,” SLØK said: “Therefore, Wall Street banks work less as shocking in the current environment.”
The US debt is a dominant form of collateral in repo markets, which is an important part of the financial system, which allows banks and companies to meet banks and companies with short-term loans. In short, Fed does not want the treasury market to be seized in 2008, so Dimon and other critics of existing capital requirements should be made to be corrected in these rules.
“When many variable markets and are very widespread and very widespread in the treasures,” Dimon said: “This affects all other capital markets. This is not a favor to themselves, this is the reason.”
Such changes would not be without precedent. Fed during the COVID-19 pandemia free Treasures and bank reserves from the calculation of the additional goal ratio that allows banks to separate US debts.
Bessent has specified He wants to make this change permanent as part of a wider legulator push. Although the fed recently lost bitterness Great banks, especially JPMorgan, have Powell to address capital requirements gossip is satisfied. Several scientists can also be made without violating the foundations of DODD-Frank reforms built after the financial crisis, what they say in favor of a little regulation.
No matter what, the Fed should still have a $ 1.6 trillion treasury to stabilize the money markets at the beginning of the pandemic. Dimon said that the Central Bank will be forced to act again similarly.
“According to all the rules and rules, there will be a bbuffle in the treasury markets,” he said.
Dimon hopes the change under Trump
Dimon was not just referring to minor changes in additional goal ratio. To determine several different types of capital requirements, he said he could release the “hundred billion dollars” for JPMorgan to lend through the banking system.
Banks have been very successful During pushing back to fully exercise efforts Basel IIIAfter a large explosion of global-scale systemic banks “global-scale systemic banks, after a large explosion of industrial system. After a large explosion of the industry, the Fed collected an offer to increase the 19% proposal.
With the call of earnings on Friday, Dimon, who was credited with the convincing Trump to return the tariffs, said that with the current leadership, the current management said that the bank friendly reforms had a better chance of reform.
“I think there is a deep recognition of the defects in the system,” he said, and happily will look in a good way. “
This story was first displayed Fortune.com
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