Jan. 29 (Bloomberg) -- Jamie Dimon, chief executive officer of JPMorgan Chase & Co., blamed banks and regulators for letting consumers amass debt like “weapons of mass destruction,” leading to the global economic crisis.

“God knows, some really stupid things were done by American banks and by American investment banks,” Dimon said today at the World Economic Forum in Davos, Switzerland. “To policy makers, I say where were they? They approved all these banks.”

JPMorgan has fared better than most of its peers in the crisis, reporting a fourth-quarter profit of $702 million while New York-based Citigroup Inc. posted its fifth straight loss. Dimon’s bank salvaged Bear Stearns Cos. and assets of Washington Mutual Inc. last year, and is unlikely to make more acquisitions while it consolidates, the 52-year-old CEO said.

“We’re pretty busy,” Dimon told reporters at the forum. “We’re fully employed doing those two things, so it’s unlikely. But I would never say never.”

Losses and writedowns from the credit crisis that started with the collapse of the subprime mortgage market in the U.S. have surpassed $1 trillion, forcing governments across the world to inject cash into banks and tighten controls on the financial industry.

‘Weapons of Mass Destruction’

“We gave them the weapons of mass destruction to borrow too much,” Dimon told a panel at the forum. “I don’t blame them, I blame the CEOs of their own businesses.”

He said his bank, the world’s biggest by market value, has “plenty” of capital and had lent $150 billion over the past 90 days. New York-based JPMorgan declined 12 percent this year through yesterday on the New York Stock Exchange, the best performance of the five biggest U.S. banks. Charlotte, North Carolina-based Bank of America Corp. is down 48 percent, and Citigroup has lost 37 percent.

JPMorgan fell $2.23, or 8.1 percent, to $25.43 in composite trading on the New York Stock Exchange at 4:10 p.m.

“JPMorgan will be fine if everyone stops talking about nationalizing banks,” he said. “We’re out doing business every day making loans.”

Niall Ferguson, a professor at Harvard University and author of “The Ascent of Money: A Financial History of the World,” said at the forum that the crisis may be an opportunity for new banks to make inroads in the industry.

“We need new banks, banks that can build trust, because the old banks have lost it,” Ferguson said in an interview. “The sooner the dinosaurs die and the mammals take their place, the better.”

Bad-Bank Plan

Dimon said the creation of a federal “aggregator bank” to absorb toxic assets from firms’ balance sheets would help if “executed well.”

The Obama administration may create such a bank run by the Federal Deposit Insurance Corp., people familiar with the matter said yesterday. The proposal is aimed at freeing up capital that banks could use to make more loans. Orders for U.S. durable goods fell in December for a fifth straight month, and the number of Americans receiving unemployment benefits soared to a record in the week ended Jan. 17, separate government reports showed today.

So far, policy makers have acted on a “catch as catch can” basis, Dimon said, adding that he hopes to see all of the decision makers come together to make an effort at crafting a comprehensive plan to solving the crisis.

Getting ‘Old’

“I just wish we’d get around to getting to it now,” he said. “Because this is getting kind of old.”

He called for better oversight of the financial-services industry rather than more regulation. He also said the so-called Basel II accords on capital adequacy should be changed, and oversight of mortgage lenders stepped up.

“I’m hoping that by the end of the year we’re coming out of the crisis,” he said. “But we don’t know that, no one knows.”

JPMorgan has virtually no exposure to Bernard Madoff’s alleged $50 billion Ponzi scheme, Dimon told CNBC today. He said he believes investors who purchased notes of funds that invested with Madoff should get most of their money back.

JPMorgan, which had invested $250 million in two hedge funds that did business with Madoff, began withdrawing from the funds last year without informing clients, the New York Times reported earlier today.

Dimon said the withdrawals don’t mean the bank felt at the time that they were bad investments.

To contact the reporters on this story: Edward Evans in Davos at eevans3@bloomberg.net; Christine Harper in Davos at charper@bloomberg.net

Last Updated: January 29, 2009 16:14 EST