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Savings Accounts Are At Risk As Long As JP Morgan CEO Gets Everything He Wants
The Guardian
The CEO of America’s biggest bank, JP Morgan, appears to have Washington at his beck and call but is his push to repeal a key financial safeguard a step too far?
If you want to understand what’s wrong with the US financial system, start by asking this question: why does Jamie Dimon always get his way?
Dimon is the charismatic chief executive of the nation’s biggest bank, JP Morgan. JP Morgan has $2.5tn in assets and holds more than 10% of all the savings deposits in America. As a result, Dimon has a lot of financial firepower. This week, Dimon was one of the forces in an argument that nearly caused a government shutdown over how much power Wall Street should have. Barack Obama also backed the bill, but even Democrats are defying the president on this one.
By all indications, Dimon’s phone calls to lawmakers made the difference. As he has in many other showdowns with Congress, Dimon won.
This is not unusual for Dimon. Two years ago, his bank’s traders managed to lose $6bn in the notorious “London Whale” trade, during which it came out that JP Morgan had created a $350bn “chief investment office” that did nothing but speculate on its own behalf for profits with customer deposits. Dimon showed up for hearings on Capitol Hill with not a drop of fear, wearing cufflinks given to him by President George W Bush. (For a time, Dimon was also Obama’s favorite banker). Instead of a grilling, it became “Dimopalooza”: he was lavished with adoration as some members of Congress asked him to help advise them on future financial legislation.
Later, when the Senate permanent subcommittee on investigations produced a report on the London Whale, Dimon emerged unscathed even though one of his deputies, Ina Drew, pointed the finger at him as knowing everything that happened in the chief investment office.
