Jamie Dimon’s preposterous assertion that the United States should pull out of the Basel rules for international financial oversight on the grounds that higher capital requirements are “anti-American” is a welcome reminder to beware corporate executives brandishing patriotism.
It’s important to remember that when Dimon makes business decisions, considerations about the interests of the United States of America or the welfare of the American people play approximately zero role in his thinking. Beyond that, even if he secretly did start making decisions based on patriotic considerations he’d get fired. It’s business. There’s no gauzy sentimentality involved. Which is fine if you ask me. But it should make us extremely wary of these kind of arguments on the other side. There’s nothing “American” about an “American” bank like JP Morgan that should make us think that a regulation that’s bad for JP Morgan is somehow an attack on “America.”
Unfortunately for the world, the United States and United Kingdom spent a fair amount of the 1990s and 2000s pursuing a kind of finance-focused industrial policy, aimed at fostering giant national champion diversified financial services companies that would benefit from relatively lenient domestic regulation. In a world of cheap Chinese labor, being nice to banks to create high-value service exports was supposed to be the future of the Anglosphere. It simply didn’t work. Service exports didn’t come close to closing the trade gap, finance profits flew into the hands of a tiny number of people and both internal and regulatory risk control of Wall Street turned out to be wildly inadequate. I’m not the Basel III expert, and doubtless there are valid criticism one can offer of the Basel III rules. But the idea that a country should adopt lax bank regulation as a growth strategy, or view protection of its domestic banks’ bottom lines as a foreign policy objective, is incredibly pernicious and the time to ditch it is long past.