April 16, 2014
How Burdensome Is New Financial Regulation?
Posted by David Zaring

JPMorgan reported on how many people are required to do new regulatory compliance work.  Let's outsource to this take:

  • "That one million hours a year devoted to resolution planning is 500 full-time employees"
  • "There are 8,000 employees 'dedicated solely to building and maintaining an industry-leading Anti-Money Laundering (AML) program.' JPMorgan employs more AML compliance officers than the Treasury and the Fed combined."
  • Stress testing required 500+ FTEs
  • Compliance with Basel's new securitization rules has required 35,000 hours of work (at 2000 hours per year, that's only 17.5 FTEs, so you can see why they moved to hours there).

That's a lot of compliance, and indeed, at these rates, way more people do compliance for JPMorgan than, probably, do actual investment banking.  Of course, maybe we want all of this given that the firm is far too big to fail, and maybe we want to make banking burdensome and unprofitable.  If so, we are on our way!

Administrative Law, Finance, Financial Crisis, Financial Institutions | Bookmark

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