(Bloomberg Markets) — You wouldn’t have known JPMorgan Chase & Co. just reported its best quarter the way Jamie Dimon talked about its competitors in July 2023. ‘They’re dancing in the streets,’ the CEO said . said, referring to hedge funds and private equity firms that moved into the lending business as banks like his faced higher capital requirements.

When Donald Trump won his return to the White House, it was the financiers’ turn to boogie. “A lot of bankers are dancing in the street,” Dimon told CEOs at a Nov. 14 global summit. “They’ve had years and years of regulations, many of which have blocked credit.”

Wall Street was grimacing before the elections. Executives tended to lament the rules of the road: dissatisfaction with old regulations, frustration with the prospect of new ones, and uncertainty about how they would take shape. “Every time we change our minds, there’s a new capital requirement, or a new regulation, or something new that makes things more difficult – and after a while it happens to you,” says Sandy Warner , who led JPMorgan decades ago. “Free accumulation will stop. After all, one of Trump’s agendas was to cut regulations.”

But the era that made bankers defensive also made them, according to their own profit figures, more money than ever. In 2007, when George W. Bush was president and the global economy was heading toward financial crisis, JPMorgan made a record profit. He continued to set new records again and again: six times during Barack Obama’s years in the White House, then twice during Trump’s first term. The bank did even better when Joe Biden was president, outperforming in 2021 and then 2023. If all goes according to plan, 2024 will be its best year yet.

Goldman Sachs Group Inc. and Morgan Stanley set their own profit records during the Biden years. And shares of all three banks hit their highest levels on record in the weeks leading up to last November’s election. In total, the six largest U.S. banks – a group that also includes Bank of America, Citigroup and Wells Fargo – have earned more than $1 trillion over the past decade.

Despite all this, some leaders positioned themselves as outsiders in the face of government bureaucrats who did not understand or appreciate their work. Dimon’s comment last year about competitors was triggered by a trio of regulators proposing to increase the capital reserves that banks must maintain to avoid collapses like those of the 2007-08 crisis. The idea was part of a much-delayed finalization of global banking rules known as Basel III Endgame. After Trump won his return to Washington, Jane Fraser, CEO of Citigroup Inc., said she anticipated these tighter capital regulations would be significantly relaxed, if passed. “I would expect a lighter version of the proposal,” Fraser told CNBC the week the election was called. And the game is on for mergers and acquisitions. The Biden administration’s increased scrutiny of mergers has kept many companies on the sidelines, depriving banks of lucrative fees for pairing companies. A more favorable government approach to tie-ups, combined with lower interest rates, is prompting bankers to prepare for a resumption of their investment banking activities.

Even so, Trump will face tensions between satisfying his billionaire backers and meeting the expectations of the working-class cohort that sent him back to the White House. And his campaign promises to impose giant tariffs, deport millions of undocumented immigrants and extend his latest round of tax cuts could put pressure on prices and the federal deficit, some economists warn. Inflation fears could eventually lead to higher interest rates. But even as Trump considers unorthodox appointments, threatens to undermine the independence of the Federal Reserve and embraces a crypto industry that parts of Wall Street despise, bankers are optimistic about his ability to deliver on his biggest promises. ‘business. “I’m not the type to dance in the street. I keep my hands in my pockets,” says Warner, the former JPMorgan executive. “I’m definitely smiling.”

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