Isn’t it nice that we can all look back at the financial crisis of 2008-10 and just laugh? Isn’t it about time we forgive the too-big-to-fail financial institutions that wrecked our economy and once again revere them as masters of the universe? I didn’t think so, either. But apparently if you’re one of the too-big-to-fail firms that caused the financial crisis and have made it through relatively unscathed thanks to billions of dollars in taxpayer assistance, it’s easy to move on.
Speaking in Miami, JPMorgan Chase CEO Jamie Dimon recently got some laughs with the understated acknowledgment that the big banks have made some mistakes. Further, while discussing the “big dumb banks” that brought the country to its knees, Dimon said that the resolution authority over these institutions should involve “Old Testament justice” and not taxpayer assistance.
Well, I couldn’t agree more. But pardon me if I’m not laughing. I don’t think that the financial and economic damage that these megabanks have created is particularly funny. And while it’s nice to hear that the CEO of the nation’s largest bank thinks too-big-to-fail firms should be subject to the same set of rules as every other bank in the country, actions speak louder than words. While the leaders of the community banks that have failed in the years following the financial crisis have been held accountable, megabank CEOs have enjoyed golden parachute retirement packages while the institutions they managed were propped up with government support.
It’s easy to get up on a stage and talk about fairness and accountability in financial regulation. But if you are one of the beneficiaries of favorable treatment, actions speak louder than words. As ICBA and the nation’s community bankers continue their campaign for equitable treatment from regulators and tiered regulation, I hope Mr. Dimon and his colleagues on Wall Street do not forget his plea for taking on the too-big-to-fail problem.