JPMorgan’s Teflon CEO Glides Past Reputation Hits
JPMorgan Chase & Co (JPM). and its chief executive officer, Jamie Dimon, have been dealing with a blitz of bad news of late, but you wouldn’t know it from the accolades that keep getting heaped on them.
There was the $6.2 billion trading loss best known as the London Whale debacle that Dimon dismissed as a “tempest in a teapot”; the humiliating hearing before Senator Carl Levin’s Permanent Subcommittee on Investigations, where we learned that Dimon had played a role in managing the wrong-way trades; and, to top it off, the New York Times on March 26 reported that eight federal agencies were circling the bank with various probes. …
…To win a prize for crisis management, of course, you need to be in a crisis, but that doesn’t seem to sway supporters of the bank or its CEO, who make what sounds like a reasonable argument: JPMorgan is making money, which makes shareholders happy and keeps the board off Dimon’s back. So what’s not to like?
Amar Bhide, a professor of international business at Tufts University’s Fletcher School of Law and Diplomacy, has done some thinking about that question, and said JPMorgan and its competitors are making too much of their money with taxpayer support.
“From the point of view of shareholders, Dimon is not doing a terrible job,” Bhide said. “One could take the extreme point of view and say that you want these people to gamble because they are gambling with the public’s money. If you are a stockholder, you get a nearly free ride, so why not?”
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