Jamie Dimon, JP Morgan CEO Lashes Out Against Bank Bashing
DAVOS, Switzerland (By Lisa Jucca) - JP Morgan Chase's boss Jamie Dimon lashed out at persistent bank bashing nearly three years after the global credit crisis began, in particular the tendency to put all financial institutions in the same basket.
Dimon, credited with being one of the few U.S. bankers who ably steered his firm through the financial turmoil of 2007-08, told the annual World Economic Forum that not all banks made the same mistakes in the run up to the crisis.
"Not all banks are the same and I just think that this constant refrain 'bankers, bankers, bankers' is just unproductive and unfair. People should just stop doing that," Dimon told a panel on "The Next Shock: Are We Better Prepared?"
The United States government spent hundred of billions of dollars of public money to bail out financial institutions, after the dramatic failure of Lehman Brothers in the autumn of 2008, through the controversial Troubled Asset Relief Program (TARP).
"There is a huge misconception. Not all banks needed that TARP. Not all banks would have failed," Dimon said. "A lot of banks were stabilizing the problem -- JP Morgan bought Bear Stearns because the U.S. asked us to."
Dimon sounded upbeat on the outlook for the banking sector, saying the global financial system was sounder than back in 2007 despite widespread concerns on the stability of the euro zone and of possible municipal bankruptcies in the Unites States.
"I am optimistic. The system is stronger than three years ago," he said.
Dimon, whose banks invests heavily in Europe, said the European Union was also right to try to resolve the euro zone's debt crisis without a dramatic restructuring that would force banks to take losses.
Separately, Dimon predicted that some U.S. municipalities would go bankrupt, though he said he did not believe that this would trigger systemic woes.
"There are 14,000 municipalities and you are unfortunately going to see some bankruptcies."
"It will be an issue for some and they have built up these obligations, pensions kind of snuck up on people... you are going to see some municipalities use the bankruptcy courts to try to renegotiate some of those contracts."
Dimon said the total deficit of all states and all municipalities was $200 billion relative to the total U.S. federal deficit of $1.5 trillion.
"I just don't think it's going to stop growth in 2011 or 2012," he said.
His biggest current concern, he said as a final remark to the session, was that "bad policy" could make things worse as the industry is trying to recover.
(Editing by Mike Nesbit)
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