Beware the Ides of March.
That admonition must have special resonance for one Jamie Dimon, who is only the world’s most important private banker and chief executive of America’s largest bank, JPMorgan Chase.
Five years ago, he was embroiled in mid-March madness — cobbling together a near-shotgun marriage with Bear Stearns over the course of a weekend. It was a deal, done with the encouragement from the Treasury and the Fed, that made a bank that was too big to fail even bigger.
Back then, young Jamie was looked upon as a wunderkind who had snapped up Bear in a deal that cost the House of Morgan less than the value of the acquisition’s new Midtown headquarters building.
What a difference five years make. On the Ides of March 2013, Dimon’s legacy was on full display — not in the Roman Senate but in Washington’s — where his chief deputies, current and former, didn’t do too much to paint an image of a well-run banking institution. No, the hearing on Friday looked more like an exercise in passing the buck.
At issue: who was responsible for risk management and disclosure relating to the bank’s outsized derivatives bets at its London trading desk — trades that were so big they earned the trader there the name “The London Whale” and beached JPMorgan’s bottom line to the tune of $6.2 billion.
Last spring, the price tag on that bad bet was put at a mere $2 billion, and Dimon, while being praised for owning up to the red ink, described it as a “complete tempest in a teapot.”
Some teapot. In damning e-mails that were quoted in the Senate report, the JPMorgan trader Javier Martin-Artajo is quoted as saying of the trading: “There’s no hope, the book continues to grow more and more monstrous.”
When all is said and done, March may go out like a lamb for Dimon and the JPMorgan execs still toiling at their Park Avenue headquarters.
With the departure of Vikram Pandit from Citibank last fall, Dimon is the last superbanker standing, a testament to his superior intellect and skills.
Yet, if Dimon really wants to burnish his legacy, he should testify about what in the world was going on last March in London — and why he will never let it happen again.