JPMorgan Chase estimates it would need to hold about $20 billion more in capital under recent regulatory reproposals, executives said Tuesday, as they called for further tweaks.
During the bank’s first-quarter earnings call, CEO Jamie Dimon and CFO Jeremy Barnum emphasized that overlaps remain under the recent Basel III and global systemically important bank surcharge proposals. The U.S. G-SIB surcharge “is still broken,” and targeted risk-weighted assets clarifications are needed, executives said.
Regulators have estimated large banks would be required to hold about 5% less capital than they do now, according to interagency proposals issued in March, which are meant to better align U.S. lenders with Basel III standards.
But under the proposed rules, the biggest U.S. bank is estimating about a 4% increase to its required common equity tier 1 capital, according to a first-quarter earnings presentation.
That’s based on a risk-weighted assets increase of $130 billion – a 6% increase to required capital – and a 2% decrease in the bank’s G-SIB surcharge. The lender wouldn’t benefit from stress test changes because it’s already at the 2.5% stress capital buffer floor.
JPMorgan has pushed for regulators to calculate each capital requirements component without considering outcomes for specific banks or the broader industry, Barnum said. To the extent regulators want to add conservatism, “they should make that explicit, rather than embedding it in methodological choices.”
The proposed G-SIB rule would result in surcharges for nearly all G-SIB banks increasing “meaningfully” over the next two years, Barnum said, simply due to recent growth in the system.
“This persistent miscalibration of the U.S. surcharge is obviously bad for international competitiveness, but more importantly domestically, this means that the cost of credit from JPMorgan Chase to U.S. households and businesses is likely higher than it is from other domestic, non-GSIB banks,” Barnum said.
“We recognize that we are larger and more systemically important than even large domestic peers, but in the end, the question is, how much more should the cost be?” he continued.
In his annual letter to shareholders issued last week, Dimon noted JPMorgan executives’ reactions to the proposals were “mixed,” and some aspects “are frankly nonsensical.”
Calculations that would require the lender to hold as much as 50% more capital across most loans to consumers and businesses compared to a large non-GSIB bank for the same loans “just seems to punish our success, our strength, our consistency and our balanced business model,” the CEO said.
“Everyone wants to move on,” Dimon wrote of capital requirements updates, but the latest iterations remain “very flawed in a few specific areas.”
In particular, the G-SIB proposal seems to be a “significant disincentive” to some markets business, Barnum said Tuesday.
“The depth and breadth of U.S. capital markets is a key competitive national advantage, and regulatory capital rules that, at the margin, discourage a dynamic secondary market in the United States with active participation by banks is, I’d argue, sort of not great,” Barnum told analysts. “So that’s part of the reason that we’re so focused on G-SIB, because it disproportionately affects that business.”
Bank executives have cheered de-regulatory moves made by Trump-appointed regulators, and it was widely expected that revamped capital rules would look different than previous proposals featuring 19% and 9% increases for the biggest banks.
Dimon has repeatedly railed against the regulatory framework, saying during the Biden administration that constant rules and regulations were “damaging America.” Regulators are “stuck in some academic world,” rather than the real world, Dimon said in May 2025.
He touched on that again Tuesday, arguing that there are “real ways to measure” operational risk, “not this artificial, over-architected, academic exercise.” And the risk-weighted assets designation, he asserted, has “locked up a lot of capital and liquidity for eternity, for no good reason.”
“It’s time to really look at this stuff and do it right,” Dimon said.
Executives also fielded questions regarding artificial intelligence and cyber risk, just as Goldman Sachs CEO David Solomon did the day before.
Last week, Treasury Secretary Scott Bessent and Federal Reserve Chair Jerome Powell met with big-bank CEOs to warn them of cyber risk related to Anthropic’s latest artificial intelligence model, Mythos.
JPMorgan is currently testing Mythos, “which does create additional vulnerabilities,” Dimon said. “Maybe down the road, better ways to strengthen yourself, too.”
The bank is “very well-protected. We spend a lot of money. We’ve got top experts. We’re in constant contact with the government. We’re constantly updating things,” Dimon said. “But AI’s made it worse. It’s made it harder.”
Barnum noted stronger capabilities have increased the level of attention on the topic, but “it’s not like this is the first time that anyone’s thought about the way in which these more recent generative AI tools can both make it easier to find vulnerabilities, but then also potentially be deployed by bad actors.”
