Opinion

Ben Walsh

Jamie Dimon, consistent flip-flopper

By Ben Walsh
March 1, 2013

He’s alternatively demonized and deified, but Jamie Dimon is rarely called a flip-flopper. You wouldn’t know it from recent reporting, or ego-revealing anecdotes and quotes, but he’s been surprisingly inconsistent on the issue of financial regulation.

He’s famously said some very negative things about financial regulation reform: accusing regulators of undermining economic growth; predicting that increased capital requirements would be “pretty much putting the nail in our coffin for big American banks”; comparing regulation of Wall Street pay to communist Cuba; and graphically condemning the organizational complexity of JP Morgan’s regulators.

But there’s also a mellower side to Dimon’s views on regulation. He doesn’t want to do “do a bunch of stupid stuff” (who does?), but he’s fine to “wait and see” what the impact of the Volcker Rule is. He agrees that higher capital ratios are an important factor in decreasing systemic risk and thinks increased liquidity requirements are, on balance, positive for markets (cut to the 1 hour, 50 minute mark). Dimon has even gone as far as saying that Dodd-Frank will help JP Morgan gain market share.

Was Dimon against higher capital requirements because he actually thought they were bad? I think he was (and is), but  once it became clear that they would eventually be put into place, he softened his tone. There’s not much to gain by antagonizing politicians and regulators over a forgone conclusion, and competitively, he’s right that higher capital requirements do give JP Morgan a relative advantage. Similarly on Volcker, his opposition to the rule is sincere, but he also understands that the rule, whenever it’s eventually implemented, will harm rivals’ financial performance more than JP Morgan’s .

The seeming flip-flops aren’t really contractions at all, when, instead of thinking of Dimon as either pro- or anti-regulation, you think of him as simply unfailingly pro-JP Morgan. JP Morgan generally benefits from less regulation and more financialization of the economy. On a more granular and tactical level, its interests are a bit more varied and mutable. So don’t expect public consistency from Jamie Dimon. It’s not what he gets paid to deliver.

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