US PIRG – TELL JAMIE DIMON: “LEAVE THE FED” AND OTHER BANK NEWS

by Ed Mierzwinski

JP Morgan Chase chief Jamie Dimon (photo) has been one of the leading opponents of strong bank regulations but still sits on the board of one of his bank’s chief regulators– the New York Fed — despite his bank’s recent gambling losses which probably would have been limited by a strong Volcker rule. Help us tell Jamie Dimon: it’s time to go (action). Resign from the New York Fed board. Your conflicts are not possible or presumed but real.

In his New York Times Economix column “Will there be a meaningful Volcker rule” today, MIT professor Simon Johnson explores some of the arguments that the banks and their supporters in the U.S. Senate are using to browbeat regulators into delaying and gutting this important Wall Street Reform and Consumer Protection Act provision that — if had already been implemented as envisioned — would have likely minimized JP Morgan’s shocking $3 billion and up gambling losses. Simon Johnson dismisses bank arguments here:

“Artificially pumping up market liquidity through too-big-to-fail subsidies to market makers is not a good idea. Along the same lines, allowing big banks to speculate wildly under the guise of hedging their risks is not a good idea. With more details now surfacing about how big risks were taken and mismanaged at JPMorgan Chase, this argument is currently being played down by the industry.”

The structure of the regional Federal Reserve banks — basically run by the bankers they regulate — is a classic example of the foxes guarding the chicken coop. Let’s take a first step toward reform by asking one of the foxes to leave.

Continue Reading.

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