Who will be Wall Street’s new fearless leader?That is the question at the centre of a Bloomberg piece out today about how JP Morgan’s $5.8 billion trading loss has damaged Jamie Dimon’s reputation.
Before the loss, Dimon could be counted on to be Wall Street’s poster boy. His bank did well during the financial crisis, he went toe to toe with politicians and regulators, and he wasn’t afraid to get a little dramatic about (what he considered were) attacks on the financial industry.
But then there was the London Whale, the awkward questions about what exactly hedging is and, worst of all, questions about whether JP Morgan was too big for Wall Street’s best manager to manage.
And so Dimon has faded from the spotlight recently, and, according to some, The Street has become a darker, more dangerous place. Big government is coming, with no one to protect bankers from the onslaught.
…the lack of a statesman leaves the industry vulnerable, said Greg Donaldson, chairman of Evansville, Indiana-based Donaldson Capital Management LLC, which oversees $580 million.
“The banks have no moral authority at the moment,” Donaldson said. “Jamie Dimon had it, but that’s done. The government is piling on the banks. They’re just being hammered, and it doesn’t help our economy. Somebody has to fight the damn thing.”
Harvard Business professor Rakesh Khurana added that Dimon’s exit has left “a vacuum.”
Now before we all head for the hills it should be noted that Wall Street’s $61.4 million lobby machine is still grinding along in Washington D.C., so the industry isn’t totally defenseless.