Chase Chief Says No Bank, Even His, is 'too Big to Fail'

Jamie DimonThe chief executive of banking giant JPMorgan Chase & Co says that any bank, including Chase, is not too big to fail, contradicting the fueling rationale behind the huge bailouts of the financial crisis.
Chase is the biggest, general purpose credit card issuer in the United States.
“If some unforeseen circumstance should put this firm at risk of collapse, I believe we should be allowed to fail,” Chase Chief Executive Jamie Dimon wrote on Friday in The Washington Post. “Global economic growth requires the services of big financial firms. It also requires that big financial firms be allowed to fail.”
He said U.S. banking regulators should have the power to let even the biggest lenders fall as they will “in a way that does not put taxpayers or the broader economy at risk.”
However, Dimon said regulators need to exercise authority to manage failures of large financial institutions, including the ability to replace management, sell assets, and wipe out shareholders and even unsecured creditors.
He also argued against limiting a bank’s growth because it would stifle competition and hinder the quality delivery of financial products and services.
Chase is the second-biggest U.S. bank by assets and is considered the most financially robust of the country’s four largest traditional commercial banks. Chase, along with Citigroup, Bank of America and Goldman Sachs was among the financial institutions both the Fed and U.S. Treasury officials deemed “too big to fail” following the collapse of Lehman Brothers in September 2008, a bankrutpcy that ushered in the financial crisis and credit crunch.
U.S. officials feared catastrophic ramifications in finanical markets and economies worldwide by allow any financial giant to go the way of Lehman.
The “too big to fail” concept is “politically, economically and ethically bankrupt,” Dimon wrote.

One thought on “Chase Chief Says No Bank, Even His, is 'too Big to Fail'

Leave a Reply

Your email address will not be published. Required fields are marked *