The defenders of Ken Lewis often say that the Bank of America CEO had no choice but to agree to buy Merrill Lynch once the government put the screws to him. Who could have resisted the full-court press of the Department of Treasury of the United States of America?
Jamie Dimon. That’s who.
, makes clear that the government tried a number of times to get JP Morgan Chase to buy a troubled financial firm. And every time, Dimon stuck by his shareholders and refused to cave in to government pressure.
Here’s Dimon not buying Morgan Stanley (via Vanity Fair):
Jamie Dimon had been hoping to take his first day off in two weeks. That was until Geithner called him early Saturday morning and instructed him—the president of the New York Federal Reserve seldom suggested anything—to start thinking about whether he’d like to buy Morgan Stanley.
“You’ve got to be kidding me,” Dimon replied.
No, Geithner said, he was quite serious.
“I did Bear,” Dimon objected, referring to JPMorgan’s taking over Bear Stearns the previous March at Paulson’s behest. “I can’t do this.”
And here he is again:
Paulson had gotten word that the Goldman-Wachovia deal was off, which put even more pressure on him to find a solution for Morgan Stanley. To him, JPMorgan was the obvious answer. While Dimon may have been resisting Paulson’s overtures—Paulson had broached the subject with him several times already over the past day—Paulson felt he now needed to apply some serious pressure.
“Jamie,” Paulson said when he reached him, conferencing in Geithner and Bernanke, “I need you to really think about buying Morgan Stanley. It’s a great company with great assets.”
Dimon, who had been anticipating that the government might try to foist the deal on him, was adamant.
“You’ve got to stop. This is not doable,” he said intently. “It’s not possible. I would do anything for you and for this country, but not if it’s going to jeopardize JPMorgan.
“Even if you gave it to me, I couldn’t do it,” Dimon continued, explaining that he thought the deal would cost the bank $50 billion and countless jobs.
“I don’t want to do it, and John doesn’t want to do it,” Dimon told him.
“Well, I might need you to do it,” Paulson persisted.
A few moments of silence passed until Dimon relented, but only slightly. “We’ll consider it, but it’s going to be tough,” he said.
So, you see, it is possible for a CEO to resist the Treasury’s plans for remaking the financial sector.