JPM CFO Piepszak: SLR exemptions should be made permanent

Q4 2020 earnings call

Jennifer Piepszak, Chief Financial Officer, J.P. Morgan:

Few factors that are top of mind for us are GSIB, which we’ve been talking about for a long time, and also SLR which is not something we typically talk about, but given the overall system expansion is now on focus. On the graph, what you can see here are the historical trends of GSIB and SLR base requirements, overlaid with the path of the Fed securities holdings.

You can see that during the original calibration of these rules, which included significant gold plating, the Fed balance sheet was notably lower. With the recent growth in the Fed balance sheet, we are seeing upward pressure in increases to GSIB requirements as well as the SLR shifting from a backstop to a binding measure, which will impact the pace of capital return, and these dynamics will likely persist for an extended period. The Fed temporary relief of SLR expires after March 31. This adjustment for cash and treasuries should either be made permanent or at a minimum be extended.

The full transcript of the Q4 2020 earnings call is available at

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