The 'Teflon Banker' gets what he wants

After cancer treatment, Jamie Dimon is back as banking's man in Washington

Dec 19, 2014 @ 11:49 am

By Bloomberg BusinessWeek

+ Zoom
(Bloomberg)

Years of coaxing, donating, explaining, and complaining hadn't helped the big banks reverse a rule that would restrict derivatives trading. This month, the $1.1 trillion spending bill Congress had to pass to keep the government open offered another chance. That's when Jamie Dimon, chief executive officer of JPMorgan Chase, stepped up to the plate.

Despite setbacks that woul[d dim the power of most bankers, including a $13 billion settlement with regulators over mortgage bond sales last year, Mr. Dimon hasn't lost his touch. He visited Sen. Orrin Hatch, R-Utah, and House Financial Services Committee chairman Jeb Hensarling, R-Texas, according to a colleague who asked not to be named because the meetings were private. And he worked the phones, telling politicians the rule — which would have barred trading certain derivatives in parts of the bank that have government backstops such as deposit insurance — makes life expensive and unduly complicated for banks.

When the spending bill passed, it killed the provision Wall Street hated — and reaffirmed Mr. Dimon's status as its leading power broker. “Even if those people screw up demonstrably,” says Jared Bernstein, former chief economist to Vice President Joe Biden, “their influence doesn't seem to be dented much at all.”

Mr. Dimon became Wall Street's man in Washington after he steered his bank through the financial crisis without a loss. The past two years have been more complicated. In addition to the $13 billion settlement — then the largest in U.S. history — the bank paid $2.6 billion to resolve allegations that it didn't stop Bernard Madoff's Ponzi scheme and two fines of about $1 billion each stemming from currency rate manipulation and the London Whale trading loss.

(More: JPMorgan sued by investor over 'culture of lawlessness')

News this month that JPMorgan may need more than $20 billion in additional capital to satisfy new bank safety rules didn't stop Mr. Dimon from helping to push through the derivatives rule repeal. “I think Jamie Dimon is Teflon-coated,” says former Sen. Ted Kaufman, the Delaware Democrat who co-sponsored a failed amendment to cap the size of banks.

It helps that Mr. Dimon runs America's biggest bank, which made $17.9 billion last year and $16.8 billion through the first nine months of 2014. JPMorgan spent more than any other bank on lobbying this year, and its employees and political action committees have been the biggest source of campaign contributions to Mr. Hensarling over his career. The largest bank in America doesn't need to pay to get its calls returned, says another colleague close to Mr. Dimon, who asked not to be identified discussing internal matters. When you're one of the largest employers in New York, he says, it's the politicians who call you.

Still, the bank doesn't want to be seen as throwing its weight around, Mr. Dimon has said. In October, after weeks of radiation and chemotherapy for throat cancer at Memorial Sloan Kettering Cancer Center in New York, he said in a talk called “Reflections on Resilient Leadership” that people are wrong to see Wall Street as a bunch of tough, greedy fighters. “We're more like lovers,” he said. “We want to compromise and get things done.”

Following its success in this battle, Wall Street plans to attack some of Dodd-Frank's hallmarks, including the Consumer Financial Protection Bureau and increased oversight of institutions whose failure could threaten the financial system. “The Wall Street interests — the big banks — they're back,” says Dick Durbin of Illinois, the Senate's second-ranking Democrat. Jamie Dimon's back, too.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Oct 17

Conference

Best Practices Workshop

For the fifth year, InvestmentNews will host the Best Practices Workshop & Awards, bringing together the industry’s top-performing and most influential firms in one room for a full-day. This exclusive workshop and awards program for the... Learn more

Featured video

Events

LiveOak's Carroll: Is it time to acquire?

With advisers aging, and economies of scale more critical than ever, advisory firms are consolidating at a rapid pace. So is it time to buy? Jason Carroll of LiveOak offers his thoughts.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.

CFPs, including brokers, may have to adhere to a stricter fiduciary duty

CFP Board revises its standards and aims to beef up fiduciary requirements of certificants.

CFP Board's proposal to expand fiduciary duty draws praise, carries risks

Some question whether brokers will drop the CFP mark or if the CFP Board will strictly enforce its new standard.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print