Jamie Dimon, CEO of J. P. Morgan Chase
Jamie Dimon qualifies for the president's forlorn club of "fat-cat bankers." He runs one of the nation's largest banks - J. P. Morgan Chase - with more than 10,000 public and non-profit borrowers, two million small-business customers, and 90 million consumers. He's well paid.
Dimon's bank received an infusion of $25 billion in TARP funds, and it wobbled in the wake of the great confidence crash after Lehman failed and AIG nearly failed last September. And given the unemployment that spiked and the savings that tanked, no Wall Street executive stands high in today's court of public opinion.
Yet for those at the center of the greatest financial crisis of the era, Dimon's actions do stand apart, coming at a time when individual actions counted. As the invisible hand had failed, steady hands became essential, and his was ready.
As Lehman, AIG and other financial institutions ramped up on risky investment and debt, above all in subprime mortgages, Dimon had forced his own bank out of the business in 2006, one of the few to do so. When the subprime tornado struck two years later, his bank was more hunkered down than most.
When Bears Stearns neared collapse in 2008, J.P. Morgan acquired it at the behest of Treasury to avoid broader collapse. When Lehman was on the verge of collapse on September 14, 2008, Dimon pressed his fellow bankers to join a rescue. When Lehman did collapse a day later, he managed to prevent J. P. Morgan Chase from touching the void as archrivals Merrill Lynch, Morgan Stanley and Citigroup came perilously close.
During a banking crisis of 1907, J. P. Morgan himself had intervened, insisting that his fellow bankers ante-up to save one another. "There's the place" to sign a financial commitment, he demanded, "and here's the pen to sign." They did, and a hundred years later, an executive heir had played a similar hand.
In an era when too many bankers displayed too little judgment, Dimon did stand apart. His visible hand at a time when it really mattered helped sustain his company and avoid a systemic collapse.
Note: Independent writer Jerry Useem contributed to this column.
The comments to this entry are closed.