Jamie Dimon, CEO of J.P. Morgan Chase, strongly disagreed with the notion that the nation’s biggest banks should stop supporting new oil and gas development and production on Wednesday.
Together with other bank officials, the top executive of the biggest U.S. bank testified before a House subcommittee. According to Michigan Democrat Rashida Tlaib, there shouldn’t be any additional fossil fuel output in order to keep global temperatures from increasing by more than 2.7 degrees in the following decades.
“Please respond with a yes or no. Does your bank forbid the financing of brand-new oil and gas products? ” Tlaib questioned.
“Absolutely not, and that would lead America down the path to hell,” stated Dimon.
In response, Tlaib stated that all J.P. Morgan Chase clients who had benefited from the student loan relief program the Biden administration put forward ought to close their accounts. Dimon had called the Biden administration’s policy “badly done” earlier in the hearing.
As oil prices rose this year, gasoline prices reached a record high. Due to underinvestment in the industry, which is partly attributable to the growing popularity of ESG funds that avoid fossil fuels, U.S. oil output has slowed. Regardless of the consequences to the American economy, environmental activists have pushed banks and other institutions to refrain from making investments in the production of coal, gas, and oil.
The implications of Europe’s lack of energy security have come to light as a result of Russia’s invasion of Ukraine. Europe is dangerously reliant on Russia for natural gas because it underinvested in fossil fuel energy infrastructure at the demand of so-called climate change activist groups. The new conservative administration in the United Kingdom has implemented a massive expenditure program intended to keep household energy costs in check as a result of Europe’s rising energy prices, which are anticipated to send those nations’ economy into a serious recession.
Citigroup CEO Jane Fraser said that her company would continue to support fossil fuels.
In order to assist customers in making the switch to cleaner energy, Fraser said, “We will continue to support and invest in clients who are investing in fossil fuels.”
The head of Bank of America, Brian Moynihan, responded to Tlaib’s query in a less aggressive manner.
“We support our clients during a change. Therefore, we are financing both in new energy firms and oil and gas enterprises,” he added. “We’re assisting in tracking their progress toward the benchmark you’re referring to.”
The CEO of Wells Fargo declared his support for Moynihan.
Tlaib attacked Dimon once more before putting a halt to her line of questioning, saying, “You definitely do not care about working-class people.”
Tlaib threatened banks with laws requiring them to stop financing fossil fuels as she concluded her questions.
Tlaib added, “Regulators—including Congress and the Federal Reserve—must step in and make them if your financial institutions aren’t going to carry through on their net zero obligations.”
Yue (Nina) Chen, one of the main U.S. bank regulators, has just been promoted by the Biden administration to the position of top climate risk officer for the Office of the Comptroller of the Currency. She is seen as being in favor of the rules Tlaib described.