The nation's largest bank is scrambling to contain the fallout from a risky bet gone wrong, but some say the purge has to start at the top
Reeling from a massive $2 billion loss on a risky bet, JPMorgan Chase CEO Jamie Dimon has launched a campaign of contrition to contain the damage. "We made a terrible, egregious mistake and there's almost no excuse for it," he told NBC's Meet the Press. The country's biggest bank has also parted ways with three executives, including Chief Investment Officer Ina Drew, a veteran at the company and reportedly one of Dimon's most trusted allies. However, condemnation is still raining down on Dimon, who's vociferously opposed the sort of strong government regulation of Wall Street that critics say is necessary to prevent risky bets from causing a repeat of the 2008 financial crisis. Should JPMorgan fire Dimon?
Yes. He clearly isn't fit to lead: It's increasingly clear that Wall Street banks are essentially "playing incredibly complex computer games with unimaginable sums of other people's money," says Alex Pareene at Salon. But when rumors of the bad trade bubbled to the surface a month ago, Dimon said there was nothing to worry about, meaning he either lied or doesn't understand the complex trades his own company is making. "Jamie, I think maybe you should consider retirement; this bank is too complicated for you."
"Let's put Jamie Dimon on trial"
Hold on. JPMorgan is still a strong company: Dimon's anti-regulatory chest-beating makes it "especially tempting to beat up on" him now that he's in "deep doodoo," but JPMorgan isn't a danger to itself or the financial system, says Allan Sloan at The Washington Post. At face value, $2 billion sounds like a lot of money, but JPMorgan has $608 billion in customer deposits. The trading loss was just a drop in the bucket. While everyone can "feel free to snicker at the spectacle of Jamie Dimon losing his swagger and having to eat crow," the bank is on solid ground.
"JPMorgan is embarrassed, but not endangered"
He should at least quit the New York Fed: Unbeknownst to most people, Dimon sits on the board of the New York Federal Reserve Bank — "the very organization that is supposed to oversee his bank's financial practices," says Eliot Spitzer at Slate. If nothing else, "Dimon should resign from the New York Fed board immediately," since his oversight role is incompatible with his other role as Wall Street's anti-regulatory pit bull.
Other stories from this topic:
- Opinion Brief: JPMorgan's shocking $2 billion loss: Proof we need stronger financial reform?
- Opinion Brief: Has Obama been too tough on Wall Street?
- Analysis: How Citigroup shareholders smacked down their CEO's massive bonus