Jamie Dimon stands up to bank breakup bullies

April 7, 2016

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Who else but Jamie Dimon would stand up to the bank breakup bullies? The JPMorgan chief executive’s latest annual missive tackles everything from Brazil to Brexit. What mostly resonates, though, is an overriding message that bigger is better in finance.

Even by Dimon’s standards, the letter published on Wednesday is long-winded at 50 pages. He nevertheless outperforms peers on both content and readability. There’s an honest assessment on JPMorgan’s sluggish diversity drive and an unexpected nod to the efforts of on-site medical staffers.

The dominant theme is defending the scale of an institution with $2.4 trillion of assets. Dimon is blatant in some areas, as when he notes that JPMorgan holds enough capital to absorb not just the losses the Federal Reserve stress tests ascribed to his bank in last year’s stress test, but the entire $222 billion at the top 31 banks. There’s also a whole section entitled “Does the United States really need big banks?”

Dimon asserts there’s now “virtually no chance of a domino effect” between big banks if one gets into trouble, as they lend very little to each other. While true, it also sounds too much like fighting the last battle. Other risks, including the increasing similarity of assets they hold, go unaddressed.

Often, however, the message is more subtle. On burgeoning financial technology, for example, Dimon says funding for non-banks is likely to dry up in a crisis. In other words, beware the shadow banks new regulations may have helped create. He also points out how size affords banks like JPMorgan the ability to fight back effectively against would-be disruptors in payments and lending.

Dimon even plays the patriotism card. The bank dumped restricted business with thousands of clients after fraud reviews because just one mistake could result in severe consequences. That meant abandoning relationships where he otherwise might “have been supportive of countries around the world that are allies of the United States.”

He can be forgiven the occasional hyperbole given the opposition. As the likes of Democratic presidential hopeful Bernie Sanders and newly installed Minneapolis Federal Reserve President Neel Kashkari advance the carve-up cause with rhetorical flourishes of their own, the banking industry will have to make its case for staying big. Dimon is one of the few who might be up to the task.

5 comments

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It takes a special kind of delusion to cast Jamie Dimon, “chairman, president and chief executive officer of JPMorgan Chase, largest of the Big Four American banks”

As the victim of bullying.

Thanks for the laugh though

Posted by Benny27 | Report as abusive

And the fox said “oh no, there is no need for a lock on the hen house door.”

Posted by tmc | Report as abusive

The break-up of the four largest banks will boost the American economy, create massive opportunities for small businesses, and create 117,000 new jobs in America. This is a chance to make America great again, and create opportunities for every American.

Posted by Laster | Report as abusive

C’mon Reuters, if this had been any other proposal, say a free trade agreement, or a corporate tax reduction, there would have been any number of liars carrying water for the industry with the usual; Making America great again, and creating 97,000 new jobs for Americans. We can’t post some parody of that ??

Posted by Laster | Report as abusive

Poor put upon banks. Poor put upon Jamie Dimon.

“Leave JPMorgan alone!” lol.

Posted by BenjaminMuller | Report as abusive