JPMorgan CEO Jamie Dimon has thoughts on why big banks are important to America.
Dimon, whose firm is the largest US bank by assets, wrote an op-ed in The Wall Street Journal about the benefits of large financial institutions like his — and the services they provide to consumers and smaller banks alike.
He framed the conversation around the relationship between large and small institutions, and led with an anecdote about some negative comments about big banks that the CEO of a regional bank recently made.
“I did some digging and found that our firms have a relationship that goes back many years and spans a broad range of essential services,” Dimon wrote.
But Wall Street CEOs like Dimon are busy people, and they don’t often take the time to personally write op-eds.
So it’s unlikely that this personal tiff with another CEO is really what motivated the billionaire chief executive to take up the pen.
What’s more likely is that this is about something much bigger.
Breaking up the banks
Since the heyday of the financial crisis, politicians and activists have been calling for the end of “Too Big to Fail” banks. But this being an election year, the volume of that conversation has ticked up a notch.
On Tuesday, the Democratic presidential candidate Bernie Sanders said in a Daily News interview that JPMorgan “and virtually every other major bank in this country” are destroying the fabric of the US.
Last month the financial policy advocate Bartlett Naylor proposed breaking up both JPMorgan and Citigroup. His proposal is likely to end up in both banks’ annual proxy filings.
And then there’s the Minneapolis Fed President and former Goldman Sachs executive Neel Kashkari.
In his first speech as a Fed official, Kashkari, who led President Obama’s Troubled Asset Relief Program in the wake of the financial crisis, came out swinging with a call to break up big banks.
He advocated for “Turning large banks into public utilities by forcing them to hold so much capital that they virtually can’t fail (with regulation akin to that of a nuclear power plant).”
In that light, it’s maybe not so surprising that Dimon would choose this moment to publicly defend his firm.
The fact that he framed it around some comments made by an unnamed regional bank chief probably means that Dimon, who is a registered Democrat, was simply looking for a way to do it without appearing overtly political.