JPMorgan's Dimon says leverage levels normalising

By Muralikumar Anantharaman and Rachelle Younglai

WASHINGTON (Reuters) - Financial institutions are closer to reducing their borrowings to levels that regulators and markets want, JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) Chairman and Chief Executive Jamie Dimon said on Thursday.

Under pressure to reduce the risk to their balance sheets, Wall Street banks have been cutting borrowing relative to assets in a bid to shore up capital amid the credit crisis.

"The de-leveraging process is well on its way. I don't know if it's half or 60 or 70 percent done. That will take another minimum six months," Dimon told delegates at an Investment Company Institute conference in Washington.

That process, which can entail shedding assets, issuing equity or paying off debt, has been painful for many banks and brokers.

Dimon said leverage has contributed to the problems in the capital markets and said Bear Stearns Cos Inc (BSC.N: Quote, Profile, Research, Stock Buzz), hedge funds and banks had taken more risk than they thought they did.

Attention on funding at the biggest U.S. investment banks has intensified since Bear Stearns nearly collapsed after its liquidity almost evaporated in March.

Now the U.S. Securities and Exchange Commission, which supervises the top investment banks, including Bear Stearns, is planning to require the firms to publicly disclose their current liquidity and capital positions.

BALANCED REGULATION NEEDED