Stop Picking on Bankers, JPMorgan Chief Says

Scott Eells/Bloomberg NewsJamie Dimon of JPMorgan Chase offered a spirited defense of bankers.

6:35 p.m. | Updated

DAVOS, Switzerland — Jamie Dimon, chief executive of JPMorgan Chase, lived up to his reputation as a fierce defender of his profession on Thursday when he told listeners in Davos, including the president of France, that he was fed up with banker bashing.

Mr. Dimon said at the World Economic Forum that he was sick of “this constant refrain — bankers, bankers, bankers.”

“We try to do the best we can every day,” Mr. Dimon said during a panel discussion.

Later, Mr. Dimon urged Nicolas Sarkozy, the president of France, not to let bank regulation be driven by anger toward bankers, and he warned that bad policy-making would impede growth.

Mr. Sarkozy, in turn, reminded Mr. Dimon of the severe pain inflicted by the financial crisis. “Let’s not forget what happened,” he said. “The world has paid for it with tens of millions of unemployed who had nothing, absolutely nothing to do with it and yet paid for everything. It created a lot of anger.”

Referring to the enormous leverage used by banks before the crisis, Mr. Sarkozy said, “We have to ask ourselves, are we in a market economy or a madhouse?”

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The exchange took place during a question-and-answer session following a speech by Mr. Sarkozy.

But Mr. Dimon also broke with some others in the banking industry when he called for rules to make it easier to dissolve sick banks. Mr. Dimon invented an initialism, M.D.B.B.D.B., which he said stood for “minimally damaging bankruptcy for big dumb banks.”

The big unfinished job in bank regulation is to develop procedures to prevent big, interconnected banks from sowing distress throughout the financial system or requiring a taxpayer bailout. The Group of 20 nations are wrestling with the issue.

Some in the industry have expressed alarm at plans by regulators to identify systemically important banks and subject them to even tougher rules.

But Mr. Dimon said it should be possible to let banks fail without provoking a larger crisis. “It’s a little bit complicated, but it can be done,” he said. Investors would suffer the losses, he said.

Mr. Dimon insisted that he was not against banking regulation, just irrational regulation. He also said it was unfair to criticize banks for trying to block new rules they did not like.

Though he locked horns with the equally pugnacious Mr. Sarkozy, Mr. Dimon also had some kind words for European leaders. He said they were correct to do everything they could to prevent Greece from defaulting on its debt.

“I think it would be too risky,” Mr. Dimon said of a default. “I think they are doing the right thing.”

Katrin Bennhold contributed reporting.

via dealbook.nytimes.com

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