Tower of Basel
The Rise and Fall of Global Banking Standards
“80,000 pages of shit.” — Jamie Dimon, Chairman and CEO of JPMorgan, June 2025
I was a fly on the wall in Washington again this week. The Federal Reserve held a conference to discuss regulatory capital in banks and I zoomed in. It was a somewhat surreal experience. Chair Jerome Powell defied rumours of his departure to appear (late) to open proceedings. Bill Demchak, chairman and CEO of the sixth largest bank in America, heckled from the back row. Mike Mayo, one of my favorite analysts, took to the podium with a literal roll of red tape – which he snipped with a pair of safety scissors to the amusement of policymakers, bank executives and investors present.1
And then Sam Altman showed up. His session was billed as a fireside chat with Vice Chair of Supervision Michelle Bowman. They didn’t talk much about bank regulation – they discussed risks inherent in AI technology, fraud, and her kids’ use of ChatGPT to do schoolwork (I said it was surreal).2
But then there was this:
“One thing I believe is: you never fight biology – like evolution has had too long… And so I don’t think the fundamental things that make us work and animate society are going to go anywhere, and we’ll probably all still be complaining that we have to work too hard… Probably, if we could look from today at the people 100 years in the future, we would look at those jobs and say, those are not real jobs. You are not actually busy. You have unimaginable luxury. You have everything you could possibly need. You have nothing to do. So you’re making up a job to play a silly status game and to fill your time and to feel useful to other people, and those are exactly the things that someone from 100 or 500 years ago would say about us today. And that’s just the way of things.”
I don’t think it was meant as a slight on regulators, though there was some uncomfortable foot-shuffling around the room. Regulators certainly seem to have got busier over the years with few signs of improved productivity. When the first global capital accord was released in Basel, Switzerland, in 1988, it ran 30 pages long. The second, in 2004, was 347 pages long. The third, in 2010, stretched to 616 pages of text and mathematical formulae. And still regulators are adding and tweaking. The conference was convened to discuss not only a prospective “Basel endgame” but also rules around stress testing, the capital surcharge for the largest banks and leverage requirements.3
“It feels like an old New York City apartment that they just keep painting over and over and over again,” remarked Sharon Yeshaya, CFO of Morgan Stanley. “And you’re sort of like, what color is this supposed to be?”4
To see how we got here and where we are going, read on.