JPMorgan CEO Jamie Dimon desires US regulators to think about a ban on the quick promoting of financial institution shares

• JPMorgan CEO Jamie Dimon stated US regulators ought to contemplate a ban on quick promoting financial institution shares.
• The feedback come amid a disaster of confidence following a string of financial institution failures.
• “[If] persons are going quick after which making a tweet a few financial institution, they need to go after them,” Dimon stated.

JPMorgan CEO Jamie Dimon believes US regulators ought to contemplate a ban on the short-selling of financial institution shares.

In an interview with Bloomberg on Thursday, Dimon stated the SEC has the flexibility to analyze potential collusion amid short-sellers that could be incentivized to unfold false info, and that they need to do this.

The feedback from Dimon come amid an ongoing disaster in confidence in regional banks following the collapse of Silicon Valley Financial institution, First Republic Financial institution, and Signature Financial institution.

When requested if regulators ought to take a look at the quick sellers of financial institution shares, Dimon responded, “Sure. Look, my of us would inform me that is not the issue… I believe they could partially be mistaken.”

“Some persons are unscrupulous and so they use different means to go quick. For those who take a look at the element, the SEC has the enforcement functionality to take a look at what persons are doing by title in choices, derivatives, quick gross sales, and if somebody’s doing something mistaken, [if] persons are in collusion, or [if] persons are going quick after which making a tweet a few financial institution, they need to go after them, and vigorously, and they need to be punished to the fullest extent the legislation permits it,” Dimon stated.

Financial institution executives are on edge in a world the place info, whether or not true or not, can unfold shortly on social media platforms like Twitter and severely impression an organization’s inventory worth and underlying enterprise.

On Wednesday, PacWest Bancorp stated a report from final week that steered it was contemplating a sale to a bigger financial institution led to a ten% decline in its deposit base. The inventory fell greater than 20% on Thursday.

Final week, a report from the FT stated Western Alliance Bancorp was contemplating a strategic sale to a bigger financial institution. That report led to a swift 60% decline in Western Alliance’s inventory worth. Lower than an hour after the FT report was revealed, Western Alliance denied the report and stated in a press release that quick sellers had been guilty.

“It’s shameful and irresponsible that the Monetary Instances has allowed itself for use as an instrument of quick sellers and as a conduit for spreading false narratives a few financially sound and worthwhile financial institution,” the assertion learn.

Whereas quick sellers play an necessary position in making markets extra environment friendly and have previously recognized situations of company fraud, some financial institution executives need a break from the mayhem, at the least till the regional banking disaster ends.