The Fed Should Heed Dimon’s ‘Bad for America’ Line
US banks have emerged stronger from the past decade’s crises. The JPMorgan CEO is right to question whether excessive capital requirements are now doing more harm than good.
A good reminder.
Photographer: Chris Ratcliffe/BloombergBankers are not known for their modesty. Who could forget Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein saying in 2009 that the firm was doing “God’s work” right after the US’s biggest banks had to be bailed out by the federal government? It didn’t matter that a spokesman for Goldman Sachs said later that Blankfein didn’t mean for his words to be taken seriously; the episode just reinforced the notion that bankers were out of touch with reality.
Now comes Jamie Dimon, the billionaire chairman and CEO of JPMorgan Chase & Co., who wrote in prepared remarks ahead of congressional hearings this week that higher capital requirements for banks are “bad for America.” Some will no doubt skewer Dimon for seeming to suggest that efforts to make the banking system — the lifeblood of the economy — safer is somehow unpatriotic. And that’s not necessarily a bad thing. Bankers should be regularly reminded of just how close their reckless actions came to causing a financial system collapse back in 2008.