JPMorgan Chase (JPM) is standing up for megabanks against growing criticism and calls for their breakup.
In a paper due to be released Tuesday, a JPMorgan analyst rebuts the charge that big banks tightened up their lending too much after the financial crisis.
It’s an accusation made this month by the Federal Reserve Bank of Dallas, whose president has called for the big banks to be broken up. A recent paper from the Dallas Fed says the too-big-to-fail banks “inhibited a recovery by tightening credit standards and limiting loans” after the crisis.
But JPMorgan says that big banks have been doing their part, and then some. Large banks lend more, relative to their size, than smaller banks do, JPMorgan Chase Asset Management global head of investment strategy Michael Cembalest argues. Large banks “have generally been providing more credit relative to their ability to do so” than small and mid-sized banks, particularly for business lending, Cembalest writes.