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As the trading debacle at JP Morgan continues to tarnish CEO Jamie Dimon’s reputation, a number of officials have not-so-subtlety hinted that his role at the New York Federal Reserve should come to an end.They can add one more name to their list: Federal Reserve Bank of Kansas City President Esther George.
“Recently, the question of whether it is appropriate for bankers to serve on the boards of the Federal Reserve’s regional Reserve Banks has once again been raised,” she wrote in a new announcement.
George acknowledged that while bankers should serve in the Fed system—as they are required by Congressional mandate—they must maintain the integrity of the institution, or resign.
“There are high standards that apply to Reserve Bank directors, and when an individual no longer meets these standards, the director resigns voluntarily to allow someone who does meet the criteria to serve,” she said. “No individual is more important than the institution and the public’s trust.”
George notes that bankers like Dimon offer important and needed information on credit markets and the payments system that the Fed would have difficulty gauging without.
“Along with the six other directors, the three bankers provide critical, in-depth information about economic conditions in their communities,” she says. “The banker directors at the Kansas City Fed are closely attuned to the strengths and challenges of their local economies.”
Nonetheless, she says, the reputation of the Federal Reserve system is paramount, and if one banker cannot uphold ethical responsibilities, they should step aside.
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