Jamie Dimon Says He's Unsure If Elizabeth Warren Understands Global Banking System

Bloomberg Business article by Kim Chipman

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon took aim at U.S. Senator Elizabeth Warren, a critic of large banks, as he expressed broad concerns about leadership in Washington.

“I don’t know if she fully understands the global banking system,” Dimon, speaking Wednesday at an event in Chicago, said of the Massachusetts Democrat. Still, he said he agrees with some of her concerns about risks.

Warren, a Senate Banking Committee member, has won popular support and gained influence in her party by openly challenging the size of large lenders and their political power. She has said it was a mistake for the U.S. government to refrain from breaking up big banks, such as Citigroup Inc., after the 2008 financial crisis. Last month, as firms including JPMorgan pleaded guilty to resolve probes into market-rigging, she criticized regulators for granting waivers that let the companies continue operating certain businesses.

Dimon, who runs the largest U.S. bank by assets, said he would meet with Warren any time she wants. A spokeswoman for the lawmaker declined to comment. In an April speech, Warren, a former professor, chided “finance guys” who assert she and others can’t grasp their business.

“The finance guys argue that if you’re never in the club, you can’t understand it, but I think they have it backward,” she said. “Not being in the club means not drinking the Kool-Aid.”

‘Finance Guys’

Such bankers are smart, but no smarter than people in many other professions, she said. When their mistakes led to the financial crisis, they “took care of themselves and their bonuses while millions of people lost everything.”

Warren led the congressional oversight panel for the Treasury Department’s 2008 bailout of the financial system. She also proposed the creation of what eventually became the Consumer Financial Protection Bureau to help shield Americans from predatory financial products after the crisis.

“The problem was never that I didn’t understand what the finance guys were doing,” she said in April. “The problem was that I understood exactly what the finance guys were doing. I knew it, and they knew it.”

Dimon and Warren have crossed paths before. In a new afterword for the paperback version of her book, “A Fighting Chance,” she recounted a visit by the CEO to her office shortly after she was sworn in. She said their conversation heated up after Dimon complained of stiffening regulation, and that she warned him CFPB rules might take effect that would spell trouble for the bank.

Quoting Warren

Warren said Dimon “leaned back and slowly smiled,” and then replied, “So hit me with a fine. We can afford it.”

A bank spokesman denied in April that Dimon made the remark.

On Wednesday, Dimon recalled meeting with Warren during the CFPB’s founding to discuss credit cards. He quoted her during the encounter as complimenting the bank’s product: “By the way I have your credit card, and I love it.”

Later on Wednesday, when asked about his biggest worries, Dimon voiced concern that the U.S. eventually may be hurt by ideological decisions made in Washington. While the 59-year-old said he won’t run for office, he repeatedly returned to politics in his remarks, calling for immigration and tax reform and improvements to inner-city education.

Warren’s tactics have been a growing topic of debate in the U.S. this year. Last month, President Barack Obama accused her and other fellow Democrats who opposed his trade agenda of playing politics and misleading the public. Billionaire Warren Buffett, who profited from investing in banks while faulting the industry’s lapses, said in March that her approach to Wall Street is too confrontational.

“She would do better if she was less angry and demonized less,” Buffett, who leads Berkshire Hathaway Inc., told CNBC at the time. “I believe in ‘hate the sin, and love the sinner.’”

Source:  bloomberg.com

Posted by:  Steven Maimes, The Trust Advisor


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