ARUN PANCHARIYA: COMMENTS TO THE INTERVIEW WITH JAMIE DIMON, CEO JP MORGAN CHASE

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What the global financial services industry would need is a global regulatory institution to regulate a totally global business. The fragmentation of the market regulation and the institution that is the watch dog is one of the main reasons why the financial industry got into the present crisis. As Mr.Dimon says the regulatory process has to be in tune with the political processes. 

The financial industry developed into a global business with a massive size.  RBS in the UK for example had a balance sheet of almost double of the Size of the British economy when it was taken over by the Government. Being global institutions and of this size compared to the economy of the home country self-evident that the local governments by themselves can control these institutions.

As Mr.Dimon is clearly worried about is the effect on the banks and the economy of the new regulations such as Basel III, Dodd Frank and the Paul Volcker rules. The problem with these new regulations and the setting up of new institutions to implement the new rules is that they still tend to be locally based with the effect of skewing competition or harming the good sides of the financial markets such as market making and at the wrong time compared to the business cycle. It is at the top of the next business cycle that these rules needs to be implemented and not when the banks are struggling to survive and the economy is a historical low point with the risk of prolonging the crisis.

Arun Panchariya is specialising in cross border transaction between Asia, Europe and the US