Jamie Dimon likes banks just the size they are, thank you very much.
During Barclays’ Global Financial Services Conference on Tuesday, the CEO of JPMorgan Chase defended too big to fail banks in a fireside chat of sorts.
"There are huge benefits to size,” Dimon argued, adding that the large size of his bank allowed it to be “a port in the storm” during the 2008 financial crisis, according to The New York Times. “Big banks have a function in society."
Dimon’s comments come just a couple of months after Sandy Weill, the former Citigroup CEO famous for helping to create the Wall Street giant, said in a stunning reversal that it might not be such a bad idea to break up big banks. Former executives at Morgan Stanley, Merrill Lynch and other banks have also said they’re in favor of big banks breaking up their various units.
Dimon does have some supporters in his keep-banks-huge camp. Citigroup CEO Vikram Pandit said last month that he opposes breaking up too big to fail banks.
But while Dimon said at the conference, and has said in the past, that he supports big banks, he also says he does not think banks should be too big to fail. In a recent interview with The Wall Street Journal, Dimon said the government should "be able to take down a big bank like JP Morgan" without putting the broader economy at risk.
The actions of Dimon’s bank are one reason critics are questioning the big bank model. After JPMorgan lost billions in a trading loss in May, many began to wonder if banks were becoming too big to manage effectively.
Still, even in the wake of the disaster, which some critics argue may have been prevented if the bank had been smaller, Dimon has defended big banks, telling the WSJ in July that “being diversified is a good thing.” Even as he said that, Dimon was reorganizing the bank such that it would be easier to break up in the future.
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