Inside Financial Services

Jamie Should What?

The president of the KC Fed comes up with a silly suggestion

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I don’t understand the point Kansas City Fed President Esther George was trying to make last week with her press release, widely seen as an implicit call for Jamie Dimon to resign from the board of the New York Fed, explaining “the roles-and responsibilities-of Reserve Bank directors.” Talk about oblique! First, George quotes from the Fed’s Code of Conduct, which enjoins directors from engaging in conduct “affecting adversely the confidence of the public in the integrity of the Federal Reserve System.” Then she adds this: “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.”

Oh, come off it. To begin with, if you think Jamie should resign, just come out and say so. Who do you think you are, Yoda?

Second, what exactly did Jamie do that would hurt the public’s confidence in the Fed? Lose money on a trade? Esther, if that’s your standard for who’s fit to serve, no banker alive (or dead, for that matter) would qualify. Banking is all about balancing risk and reward. Which is to say, not all transactions are moneymakers. Beyond that, when the CIO trades did come acropper, Jamie couldn’t have acted more honorably. He disclosed them promptly, took responsibility for the problem, and began instituting changes to assure that it won’t happen again. What more does she want?

I know there’s not a lot going on out in Kansas City these days, but maybe President George could find something to do with her spare time than write idiotic press releases.

What do you think? Let me know!

16 Responses to “Jamie Should What?”

  1. rivvir

    This is one i’ll agree with you. Everyone makes mistakes, and dimon was among the first to admit his. However, from what i can gather about what went on, “Banking is all about balancing risk and reward” should have been left out of your argument.

  2. George Brett

    I’m not from KC, but there’s no reason to take a cheap shot at the city. It makes you look petty and lessens your credibility. You stay classy Tom.

  3. KB BBQ George

    Love the response. If JD isn’t qualified, who is. This coming from someone who thinks JD is overrated.

  4. Ted

    Maybe George should join the Resteurant association. Look what it did for Herman Cain. Remember, Cain was a director of the Kansas City Fed.

  5. Ted

    Based upon George’s logic, President Obama should resign because of the investment in Solendra.

  6. Ben

    Amen for Jamie Dimon; give em hell; banking is a risk business!

  7. Ed

    Dimon is no cowboy. Why on earth should anyone think he should resign from the NY Fed board?

  8. puredakota

    First, I want to agree with George Brett. Sarcasm–as the old saying from India goes–is the last weapon of a defeated wit. And Tom, I think you’re better than that.

    Second, for the reasons you stated, Tom, I also heartily agree that the KC Fed President is way off base in implying that Dimon is unsuited to be a director of the New York Fed. If there is a fight going on between the non-money center fed banks and the money center feds, I think there would be a much better battlefield to fight on than to suggest Dimon is not suited. Could we not talk about real problems?

  9. Ole

    Hurray for Esther!!! On another topic, let’s have your thoughts on First Marblehead, the bank you flogged for many years. Did you dump your shares before the collapse?

  10. puredakota

    First, I want to agree with George Brett. Sarcasm–as the old saying from India goes–is the last weapon of a defeated wit. And Tom, I think you’re better than that.

    Second, for the reasons you stated, Tom, I also heartily agree that the KC Fed President is way off base in implying that Dimon is unsuited to be a director of the New York Fed. If there is a fight going on between the non-money center fed banks and the money center feds, I think there would be a much better battlefield to fight on than to suggest Dimon is not suited. Could we not talk about real problems?

  11. New Yorker in KC

    So you’ve been to kansas city lately or when you say you “know there’s not a lot going on in Kansas City these days” you are actually just being a jackass who feels it helps his argument to put down an entire sity he knows nothing about? Really?

  12. Former FED Sr. Vp

    Talk about someone over stepping authority. She does not have standing to make this call. Arthur Burns would have been irrate if one of his associates had ever suggested such an action.

  13. Tom Rave

    When banking’s all about balancing risk and reward, therein lies the problem that gets financial institutions into trouble. That’s what led to the big loss at Chase.

    That description of banking forgets about serving customers, which should come first and didn’t seem to be a factor in the transactions that lost $. Managing the risks to get rewards while serving the customers is what it’s all about. Otherwise it’s risk taking / speculation with hopefully only the bank’s capital and not its deposits.

    As for the head of the KC Fed, sounds like hypocrasy in action while trying to get recognition for herself. Almost sounds like today’s politicians, doesn’t it?

    TR

  14. Charlie

    Tom, the plain issue now is that you have been so wrong so many times that you make Meredith stand out as plum brilliant and you just completely out of it.

  15. jane doe

    Mr Brown has been wrong so many times it is un real!!!!!!!!!!!!! He needs an new job that is for sure .He is not very good at his current position

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