JPMorgan's Jamie Dimon: Banks Shouldn't Be Too Big To Fail, Except When They Are

bloomberg.com:

Sept. 30 (Bloomberg) -- It was surprising to hear JPMorgan Chase & Co. Chief Executive Jamie Dimon say, "It would be a very bad long-term policy error to have banks that are too big to fail."

Dimon, after all, runs one of the biggest members of the too-big-to-fail club. Things became clearer when he quickly added, "By that I don't mean make the banks smaller. We're large because we have a reason to be large."

Read the whole story: bloomberg.com

Comments

[vascopyjama]

If the financial watchdogs had done their jobs, these institutions would never have been allowed to grow so big. Now we need to ensure that they are cut down to size so that they are allowed to fail if their management think they are running a casino with public money.

[MyPOLtiks]

Where is the change, Obama? Where is the REFORM?

Job loss equates to home loss No jobs, no recovery. Why so many people out of work even with the stimulus spending? Why are more jobs still being shipped overseas? There is no such thing as a jobless recovery; that is n3ocon jargon.

good articles..­. http://www.iamned.com

meanwhile, the stock market is surging and everyone is too busy to counting their money to show any initiative.

[PhilipTaylor]

Hidden “Off-Balance-Sheet” Toxic Derivatives-0ffice of Comptroller of Currency, 0CC, quarterly Report:

JP M0RGAN $81TRILLION in Toxic Derivatives!

Too-Big-NO­T-to-FAIL!

[noesis]

This jack@ass, should be taken out to a remote beach at low tide, and buried up to his neck!

[StJames]

JP Mprgan Chase did not need TARP money. Paulson made Dimon agree to take it so that B of A and Citi wouldn't look so bad. Dimon can't very well say his competitors should be broken up. I think we need to go back to Glass/Stea­gle....Inv­estment Banks on one Side Commercial Banks on the other and regulate them accordingly.

[BurtonOerney]

"One approach is to adopt some Treasury Department proposals for changing how banks operate and apply them in a sort of pilot program to only the biggest banks. The changes would include increased capital requirements; caps on the amount of borrowed money these firms may use; and a closer examination of the kinds of funding they use to operate. "

So this article advocates three things: increased capital requirements, a cap on leverage and examination (?) of whether securities can be used as assets. So two things, I guess. Examining something isn't really doing anything, is it? Both the capital and leverage requirements are in Obama's proposal and are not controversial.

By the way, if you apply a pilot program to only a few large banks, aren't you identifying them as large enough to need special rules to make sure they don't fail? Aren't we against that?

[CarmanK]

Banks should be contained in size and market rearch. No financial institution should ever be allowed to have the power to act irresponsibly and damage the nation's economy again. My grandchildren shall never see this kind of destruction of the middle class again. Reaganomics is a disaster for a democratic society and is meanspirited and inhuman. Now banks have no hearts, no souls and no community conscience unless it is mandated. The only entity in this country that should be too big to fail is the US government. We need to break up the banks' areas of responsibility. They brought this on themselves. If they had behaved well under the Bushies, we wouldn't be having this conversation now. Instead, we would be dealing with unfair treaties that export american jobs overseas. Banks cannot be trusted ever again to "do what is right" for the nation.

[Denonymous]

While I agree with your premise that financial institutions should not be allowed to have the market reach and size to be inherently essential to our economy, it should be noted that virtually all the legislative reforms and initiatives that lead to this crisis occured under President Clinton (Gramm-Lea­ch-Bliley, edict to Fannie Mae/Freddie Mac to loosen lending guidelines to stimulate home ownership, etc.). Granted, the Bush Administration deserves it's share of the blame for this mess, but you need to recognize there's plenty of it to go around.

[JohnSawyer]

"We're large because we have a reason to be large."

What reason is that? And is it a good reason for anyone other than the people running the banks, and their pals?

Too big to fail = too big to succeed.

[sposton]

If we allow these criminal institution to remain too-big-to-fail we will inevitably prove to the world that America herself is not too-big-to-fail because they are going to bring us all down with them. If Teddy Roosevelt could do trust busting why can't Obama? Is it because these criminals control Obama (the people's man) in a way they could not control Teddy Roosevelt who, after all, belonged to the same criminal classes? Or is it because Teddy Roosevelt was someone who knew that sometime we need to save capitalism from itself and Obama does not understand this?

Read today's piece by Martin Wolf:

http://www.ft.com/cms/s/0/34cbca0c-ad28-11de-9caf-00144feabdc0.html

Doesn't Wolf imply we need to take a lot more potentially radical measures to save our financial system? Obama can start acting in accordance to the mandate American people have given him and start making real changes, the kind we can believe in. Until then, shame on you Obama!

[BurtonOerney]

He's saying no regulation on investments will ever work and he's advocating no regulation or protection of companies that invest, for example, retirement account funds. I guess you could always just roll your 401k over into a savings account.

[sposton]

I think "narrow banking" is pretty radical proposal for the current financial system. Wolf is wondering if that is enough and says:

"Christophe Chamley of Boston University and the Paris School of Economics and Laurence Kotlikoff of Boston University proposed such radical ideas in the FT’s Economists’ Forum on January 27 2009. It is the simplest way I can see of avoiding the danger that narrow banking would shift the risks inherent in such activities elsewhere.­"

Here is the link:

http://blogs.ft.com/economistsforum/2009/01/putting-an-end-to-financial-crises/

I suggest you read that.

At the end Wolf says:

"The authorities will not entertain such radical ideas right now. But the financial system is so inherently fragile that radical reform cannot be pronounced dead. It is only dormant."

[BurtonOerney]

..and Wolf saying something that Iknow from your past comments you don't agree with. It's funny when the super anti-regulation financial pundits fool people with fancy talk.

[sposton]

I don't agree with everything that anyone says and that must include Wolf. I enjoy reading his piece every Wednesday morning, even when I disagree with him, which is not that often. Perhaps, just perhaps it is you who may have misunderstood Wolf's intent. Nah, that would be impossible for a sophisticate like you. It is only peasants who are fooled by fancy talk.

I suggest you re-read Wolf's piece, including the link that he mentions.

[Palemoon]

Nothing is ever too big or too important to fail. Nothing should be either. The most dangerous economics mentality is that something is too big to fail.

The problem, of course which none of them can see, is that if we had laws against monopolies and monopolistic holding companies, then none of this would have happened in the first place.

[tiredlady]

Yes, but it's the 'economies of scale' thing that gives these slime their massive salaries, bonuses, and stock options. If it ain't big enough, they don't get enough- whatever enough is to a black hole of morality and common sense.

[shivasquest]

JP Morgan brought their gaussian formula to joe cassano at AIG.
They knew it was a scam .
They collapsed the international economy on purpose.

[robjh1]

Let's be honest. The banks fail and we all loose for their reach is tied to so many parts of society.

"and we are not saved..."

[ImissBush]

cant argue w/ tht kinda reasonin

[PaulPete]

We need more Taibbi and Roubini ..they are the ones who speak on behalf of REAL Americans; not Beck, Hannity and Palin

hat tip to; http://www.iamned.com

The f0x news 1diot box is ruining America

Also Rachael Maddow needs to get over her Buchanan HS crush! Get a room you two!

[dfranz]

When is something going to be done about mega corportions that morph into monopolies? Price fixing is a crime to the American public and requires a champion in congress to do something about it. We as consumers are helpless as our only option is to not spend our money which is not always an option.

[BurtonOerney]

If price fixing is against the law,what do you want Congress to do about it? Pass a law against it?