Tom Keene Talks to MIT Professor Simon Johnson
Since you wrote your book 13 Bankers [in 2010], the situation of the big banks hasn’t changed much, has it?
If the banks were too big to fail in September 2008, they’re even more too big, too systemic, to fail now. We have not at all dealt with that problem.
Jamie Dimon, CEO of JPMorgan Chase, says we need big banks. State the case for a smaller JPMorgan.
The London Whale.
So management can’t handle all the risks in such a big bank?
Absolutely. And Jamie is regarded as one of the best in the business.
Did JPMorgan stumble because it expanded too much, so nobody’s talking to each other across the Atlantic?
This is not accidental. AIG Financial Products, go back to that. [AIG Financial traded in high-risk credit-default swaps that brought down the company.] Why do you put these operations in London? London is still a light touch for regulation, I’m afraid to say.
JPMorgan is doing better than ever.
When two planes almost hit each other, we don’t say, “Well, that’s fine. They missed.” We ask, “What happened? How do we prevent anything like this from happening again?”