Dimon Not Sure JPMorgan Would Rescue Bear Stearns Again
JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon said he did the U.S. a favor by buying Bear Stearns Cos. in 2008 and he might not go through with it again because of how much the deal ultimately cost.
“Would I have done Bear Stearns again knowing what I know today?” Dimon asked today in Washington. “It’s really close. Knowing what I know today, if they called me again to do something again like that, I couldn’t do it.”
The board of the New York-based bank probably would veto the idea because of all the financial obligations that followed, he said. “We’ve lost $5 to $10 billion on various things related to Bear Stearns,” Dimon, 56, told an audience at an event sponsored by the Council on Foreign Relations.
Eric Schneiderman, New York state’s attorney general, sued JPMorgan earlier this month, claiming that Bear Stearns businesses had deceived mortgage-bond investors about defective loans backing securities they bought. The result was “monumental losses” that haven’t been fully identified, he said.
JPMorgan, now the biggest U.S. lender by assets, completed its rescue of New York-based Bear Stearns after the Federal Reserve agreed to take control of a $30 billion portfolio of mortgage-linked Bear Stearns assets. Dimon has told shareholders he needed government guarantees to salvage the securities firm, which was facing an exodus of clients and lenders. Dimon said the purchase price was about $1.5 billion.
“We simply could not and would not take on any mortgage risk,” Dimon wrote to shareholders in a 2009 letter. “We were not buying a house, we were buying a house on fire.”
To contact the reporter on this story: Susanna Pak in New York at spak10@bloomberg.net
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net
Oct. 10 (Bloomberg) -- JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon says his bank did the U.S. a favor by buying Bear Stearns Cos. in 2008 and he might not go through with it again because of how much the deal ultimately cost. He spoke today in Washington at an event held by the Council on Foreign Relations. (This is an excerpt. Source: Bloomberg)
Oct. 10 (Bloomberg) -- Jamie Dimon, chief executive officer of JPMorgan Chase & Co., talks about the European debt crisis, the outlook for the global economy, financial regulation and the need for political agreement on addressing the U.S deficit and debt. Dimon speaks at an event held by the Council on Foreign Relations. Council President Richard Haass moderates the program. (Source: Bloomberg)
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