Video: FBN’s Charlie Gasparino on why JPMorgan may be the bank facing the most risk from the financial reform bill -- June 8, 2010
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JPMorgan May Take Brunt of New Financial Reform
The conventional wisdom on Wall Street has been that the new financial-reform package will squeeze earnings at Goldman Sachs (GS: 138.05, 0.14, 0.1%) much tighter than most of its competitors because of limitations on so-called proprietary trading
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But executives at Goldman Sachs have been telling clients and investors just the opposite is true; in fact, it’s the firm’s chief competitor, JPMorgan Chase (JPM: 37.64, -0.13, -0.34%), that could get hit the hardest, FOX Business Network has learned.
The problem for JPMorgan is that as a commercial bank, its capital requirement might be tougher. Case in point: If banks are forced to spin-off their derivatives businesses known as “swaps” into a separate unit, JPMorgan under current rules might be forced to hold more capital than Goldman Sachs.
FOX Business has learned that JPMorgan officials, all the way from lobbyists to the firm’s CEO, Jamie Dimon, have been working overtime to soften the financial regulation because of its implications for the big bank. At one point Dimon even got into a heated exchange with the U.S. Senator from New York, Kirsten Gillibrand.
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