- Bank of America CEO Brian Moynihan
views regulatory shifts as a necessary restructuring.
- JPMorgan executives warn that
regulatory changes are dominating industry attention.
- Wells Fargo and other banks seek
clarity on stress tests and capital requirements.
- Industry leaders emphasize the need
for balanced regulations that support economic stability.
Bank executives are weighing in on
the rapidly evolving regulatory landscape, with some welcoming the shift in
approach while others warn that the changes are consuming excessive focus.
Speaking at investor conferences this
week, leaders from major financial institutions called for a balanced
regulatory framework that maintains economic stability while allowing banks to
operate effectively.
At Bank of America’s conference on
Wednesday, CEO Brian Moynihan described the regulatory changes as a structured
review process rather than a disruptive overhaul.
He compared it to a "classic
re-engineering" effort, where agencies pause, assess, and then move
forward. Referring to recent directives from the Consumer Financial Protection
Bureau (CFPB), Moynihan emphasized the need for careful, measured regulatory
action to avoid unnecessary harm.
JPMorgan Chase executives took a
different stance, describing the regulatory shifts as overwhelming. COO
Jennifer Piepszak stated that the changes are "taking all the oxygen in
the room", while CFO Jeremy Barnum referred to the situation as a “shock
and awe moment.”
Barnum urged regulators to avoid
reflexively anti-bank policies, calling instead for rules that allow financial
institutions to support the economy while ensuring system stability.
Wells Fargo CFO Mike Santomassimo
acknowledged a significant shift in regulatory tone and welcomed efforts to
increase transparency in the Federal Reserve’s stress testing process.
He expressed optimism about
forthcoming discussions on stress test changes and capital requirements,
calling them potentially constructive. Wells Fargo, along with other financial
institutions, is eager for a finalized Basel III rule to provide much-needed
certainty for balance sheet management.
Moynihan highlighted the challenge of
regulatory consistency, warning that frequent shifts in policy make it
difficult for banks to operate effectively. He argued that some existing
regulations have overreached their intended scope and need to be reassessed.
"We’ve got to make sure stuff sticks to the ribs," he said, warning
against constant regulatory pendulum swings that create uncertainty.
KeyBank CEO Chris Gorman emphasized
that regulatory changes take time to fully materialize, as agency staff remain
constant even as leadership shifts.
He noted that a substantial amount of
bank resources is devoted to regulatory compliance, including preparing for and
participating in examinations. Greater flexibility in regulatory oversight, he
argued, would allow banks to better allocate their time and resources.
Flagstar CEO Joseph Otting, who
previously served as Comptroller of the Currency under the first Trump
administration, stressed that bank supervision is an area where new leaders can
exert significant influence.
With Rodney Hood now acting as
comptroller and Jonathan Gould nominated to lead the Office of the Comptroller
of the Currency (OCC), Otting expects the administration to encourage greater
bank participation in financial markets.
He suggested that certain enforcement
actions, which he described as the "speeding ticket" aspects of
regulation, may decrease under the new leadership.
As regulatory agencies reassess their
approach, bank executives are watching closely to see how new rules and
supervisory strategies unfold. While some welcome the opportunity for
recalibration, others remain cautious about the broader implications.
The industry is seeking a balance—one
that fosters economic stability, ensures financial security, and allows banks
to play a meaningful role in supporting economic growth.
