Big banks, under pressure, on defense at Davos
for rigging key interest rates, HSBC has been fined for allowing money-laundering and Standard Chartered has been penalized for dealing with Iran. Even Dimon's own bank has suffered an embarrassing $6 billion trading loss on complex derivatives.
All of which has only given ammunition to the critics who say banks are too loosely regulated, too unethical and still so large that their collapse would threaten the economy.
Governments and regulators have moved to clamp down on banks and their risky practices since 2007. In the United States, legislation known as Dodd-Frank seeks to avoid taxpayer-funded bailouts of banks by barring them from engaging in risky trading on their own account. The European Union is considering proposals to have banks separate their riskier investment banking operations from the rest of their business. Meanwhile, the British government is moving toward a different proposal to require banks to ``ring-fence'' their retail banking within their organization.
Beyond that, banks are also being required to hold more financial padding against possible losses through an international agreement known as Basel III.
However, the push to regulate leaves many dissatisfied. Critics of the banking industry claim that some of the new measures _ such as requirements to hold capital buffers against losses _ were in fact around ahead of the 2007 crisis but were ineffective as banks found ways around them.
Banks themselves agree that the capital measures are needed, but they are concerned that, because these new rules are often being imposed on a national or regional basis,
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