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Mounting yet another defense of JPMorgan Chases size and scope, Chairman and CEO Jamie Dimon pointed out the fallibility of smaller banks in his annual letter to shareholders.
April 8 -
JPMorgan Chase executives used an annual investor gathering to hammer home their arguments why the company's sum is more valuable than its parts and to promise investors that they will keep slicing costs.
February 24 -
Investors' demands that the country's biggest bank produce better earnings amid costlier regulations are prompting fresh cries to break up JPMorgan Chase.
January 6 -
Busting up JPMorgan Chase would result in a collection of financial services companies with higher back-office costs, more divided capital and less power to be a world leader, the company's CFO said Tuesday.
February 24
The financial crisis caused by Wall Street has been devastating for the U.S. economy, bringing on a downturn from which we are still emerging. But apparently there are some on Wall Street who still don't understand the effect the collapse they constructed has had on the rest of us.
In a recent
With baseball season underway, I get the feeling Jamie Dimon woke up on third base and thought he hit a triple.
During the crisis, American taxpayers forked over hundreds of billions of dollars to Wall Street firms to keep them afloat during the crisis they spawned. Had big banks been allowed to fail like smaller institutions, they would have decimated the FDIC deposit insurance fund many times over.
Now that these megabanks are back on their feet and bigger than ever thanks to their government bailouts, they continue to reap the benefits of taxpayer support. As the Government Accountability Office
Meanwhile, let's not forget that the 500 community banks that Dimon cites failed in recent years because of a recession created by Wall Street. A separate
Ridiculing the smaller financial institutions that have to answer to the free market that do not enjoy an absolute taxpayer backstop against failure is beyond hubris. It shows a complete unwillingness to accept responsibility. It shows that Wall Street, infantilized by privilege, has learned nothing from what it wrought in those panic-stricken months in 2008 and 2009 and in the years of economic doldrums that have followed.
That is not only infuriating to those of us who have had to survive on our wits instead of billion-dollar backstops it is fundamentally dangerous. The danger lies in Dimon's point that the largest banks are not the riskiest. He suggests the megabank model is nothing to worry about, even though its taxpayer-funded backstop incentivizes large institutions to continue growing and taking outsized financial risks. His point in fact, his plea, to shareholders who might prefer to split up the massive institution into smaller, more manageable and more valuable parts was that they've got a pretty good thing going and shouldn't relinquish the benefits of their sheer size and complexity.
We as a nation cannot allow ourselves to fall back into the too-big-to-fail trap. We must continue to seek ways to end federal subsidies and funding advantages for the largest financial firms that incentivize risky behavior and put taxpayers at risk. And we shouldn't fall victim to the siren song of the Wall Street megabanks, those institutions to which the rules of the free markets do not apply.
Camden R. Fine is president and chief executive of the Independent Community Bankers of America. Follow him on Twitter