WASHINGTON Jamie Dimon, America’s most celebrated banker, heaped criticism on regulators and politicians during a high-profile visit to the nation’s capital Wednesday, warning that overregulation is inhibiting business and that political stalemates threaten the economy.
The chief executive officer and chairman of JPMorgan Chase & Co. spoke before the Council on Foreign Relations, denying he has any interest in becoming treasury secretary but sounding exactly like a man who wanted the job. One example: He sympathized with critics who complain that no major Wall Street actor has gone to jail for the financial crisis.
“I do think the American public feels there was no Old Testament judgment. They saw banks bailed out and people making all that money,” said Dimon, 56.
But Dimon, self-identified as a Democrat, said that’s not an excuse to punish the entire sector. He was particularly scornful of a civil suit brought Oct. 2 against his bank by New York’s attorney general and supported by the Obama administration. That suit seeks damages for alleged misdeeds by Bear Stearns, the failed investment bank that regulators asked Dimon to purchase in March 2008 to save the financial system from a meltdown.
Asked whether he’d make the purchase again with help of the Federal Reserve, Dimon said that the acquisition has cost his bank as much as $10 billion and that he was the one offering the helping hand.
“No, we did them a favor. Let’s get this one exactly right,” he snapped, adding it’d be difficult to do it again if asked. “It’s real close; it’s really close. My board wouldn’t allow me.”
Dimon warned lawmakers to make a deal on the debt and deficits soon, noting that they risk crisis in not getting both under control.
“I can’t honestly tell you I know it’s going to be two years or five years, but it will happen,” he said, adding that “the United States can’t borrow indefinitely.”
Dimon said he understands the need for regulation in the wake of crisis. “But I think government should think twice before it punishes businesses every time something goes wrong,” he said.
Dimon repeated that he supports much of what’s in the Dodd-Frank Act, the sweeping 2010 revamp of financial regulation that was a response to the crisis.
But he took issue with some of its most important provisions. One is regulatory requirements to keep more capital on hand to respond to future crises, which he argued crimps lending and investment.
Repeating a controversial public challenge of Federal Reserve Chairman Ben Bernanke, Dimon said the cumulative effects of financial regulation are hurting the economy.
Famous for a “fortress balance sheet” that allowed his bank to weather the financial crisis, Dimon shook off criticism of the $5 billion losing bet earlier this year by a JPMorgan Chase trader nicknamed the London Whale.
The company “had a gap; we screwed up. And by the way, that quarter we made $5 billion. … It isn’t going to sink our ship. We have $150 billion in capital,” Dimon said.
“If an airplane crashes, should we stop flying all airplanes? … Only when I come to Washington do people act like making a mistake should never happen.”