Dimon tells Bernanke he fears new rules hurt recovery

WASHINGTON Tue Jun 7, 2011 5:33pm EDT

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WASHINGTON (Reuters) - JP Morgan Chase & Co Chairman and CEO Jamie Dimon said new financial regulations could retard the U.S. economic recovery, raising concerns about job creation and credit during a question and answer session with Federal Reserve Chairman Ben Bernanke on Tuesday.

"Has anyone bothered to study the cumulative effect of all these things?" he said of the new rules, after reciting a list of policy changes made in response to the massive banking and financial crisis that plunged the U.S. economy into recession.

"And do you have a fear, like I do, that when we look back and look at them all that they will be a reason it took so long that our banks, our credit, our businesses and most importantly, job creation, started going again?" asked Dimon, who led the bank when it acquired Washington Mutual at the height of the crisis.

Bernanke, speaking at a banking conference in Atlanta, asked Dimon to give the new regulations time. The financial crisis revealed "lots of weak spots" that regulators must address, he said.

"We are trying to develop rules that make sense, that are consistent with good practice, but which don't unnecessarily impose costs or unnecessarily constrict credit," he said.

Bernanke added that he did not know of any study of the regulations' cumulative effect.

"It's probably going to take a bit of time before we -- over time-- figure out where the cost exceeds the benefit and we make the appropriate adjustments," he said.

(Reporting by Lisa Lambert; Editing by Dan Grebler)

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