Make Banking SAFE

thedailybeast.com — It’s official. Just as he was voted in for a second term as Class A New York Fed director in February 2010, Jamie Dimon was reelected chairman and CEO of JPMorgan Chase yesterday afternoon. He got to keep his $23 million pay package, too. All without breaking a sweat. This means that at each of three of the top five bank-holding companies dominating U.S. derivatives exposure, loans, assets, and deposits, the same man holds the chairman and CEO positions—at Goldman Sachs, Wells Fargo, and JPM Chase. (Bank of America and Citigroup separated those roles.). If the stock buckles under another “discovery,” shareholders can take comfort in blaming themselves, not Jamie Dimon.

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washingtonpost.com — When Jamie Dimon testified before the Financial Crisis Inquiry Commission in 2010, he said that when his daughter asked him what a financial crisis was, he told her “it’s something that happens every five to seven years.” He seems intent on validating his prediction. But the United States went for decades without a financial crisis after the New Deal regulations shackled the banks. It was only with deregulation under Reagan and Clinton that financial crises have been inflicted on us regularly. Now Dimon’s bank’s bad bets have given us one last warning: It is time to break up the big banks.

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thedailybeast.com — It’s nice to see a human take actual responsibility for something every once in a great while, so kudos, Ina Drew, for resigning from J.P. Morgan. But here’s another question. How about Jamie Dimon take responsibility and resign? No? Ridiculous? I’m well aware that the suggestion will strike most people as ridiculous. And I am here to say that the very fact that it sounds ridiculous demonstrates the sickness that we have come to accept as normal. We live in a society whose elites do everything they can to take no responsibility for anything. And that—not gay people who want to get married, not big government, and not even Wall Street greedheads per se—is what’s really wrong with this country. We really must diagnose this properly and precisely before we can fix anything.

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salon.com — "Just because we’re stupid," says Jamie Dimon, "doesn’t mean everybody else was.” Dimon’s self-criticism gets it all backward. The fact that JPMorgan was so very stupid is so very scary because we can rest assured that just about everybody else is doing things even more idiotic. The whole point of the infamous “Volcker Rule” included in the Dodd-Frank bank reform act is to restrict the banking sector’s ability to clobber the economy by doing dumb things. However, the Volcker Rule is not yet in effect. One bad stumble by JPMorgan that, lucky for us, doesn’t seem likely to ignite a system-wide crash isn’t going to make a dent in Washington regulatory policy. On the other hand, there could well be real political repercussions. Because if anyone is going to come out of this mess looking even stupider than Jamie Dimon, it’s got to be Mitt Romney — the presidential candidate actively campaigning on a pledge to repeal Dodd-Frank.

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huffingtonpost.com — We are apparently reaching the stage in the JPMorgan $2 billion fail-scapade when the patsies are identified and shamed. JPMorgan co-CIO Ina Drew has already cashed out in the wake of the losses, with two underlings, Achilles Macris and Javier Martin-Artajo, expected to follow. Drew's group seems to have been running some sort of sub rosa trading game when everything went wrong. So perhaps the axe is falling in the right place. At the same time, the activities that Drew and her cohorts seem to have been engaged in were squarely in line with Jamie Dimon's vision for the company, which was "transforming the once-conservative unit from a risk manager to a profit center."

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progressive.org — So Jaime Dimon has pushed Ina Drew, his chief investment officer, to walk the plank. Dimon called her bad bet that cost the bank more than $2 billion “stupid.” But he himself, just a month ago, called the problem “a tempest in a teapot.” So why doesn’t he hold himself accountable, and push himself down the plank? And why doesn’t his board demand his resignation?

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slate.com — What to do with Jamie Dimon? The CEO and Chair of JPMorgan Chase has tried so hard in the past several years to seem the “good banker.” He is so charming and gracious, yet all the while lobbying, cajoling, pushing, and wheedling to eviscerate any semblance of real reform on Wall Street. He shrugged off the cataclysm of 2008 as just something that happened, like the weather — no need for any structural reform. Now the chickens have come home to roost—at least 2 billion of them — and it is clear that Chase is like every other big financial institution with distorted incentives. But it isn’t so much money, they cry! True, in the context of Chase’s balance sheet.. But it shows once again the impossibility of trusting the banks in the absence of structural reform and regulation to control their willingness to take almost unmitigated risk.

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salon.com — Let’s put JPMorgan Chase chairman, president and CEO James “Jamie” Dimon on trial. Mr. Dimon has a reputation for being the sagest guy on Wall Street and an expert at managing risk. JPMorgan emerged from the financial crisis not just unscathed but secure enough to step in and rescue Bear Stearns when the government asked it to. (He gets very mad when you say that his bank got bailed out by the government, and he insists that the government made him take all that free money.) Then his bank somehow accidentally lost billions of dollars last week, whoops! And he is really embarrassed, but not embarrassed enough to fire himself. So, let’s put him on trial and force him to explain what good he and his bank are.

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