Davos pits Jamie Dimon vs. Paul Singer
So much for banks being less controversial at this year's World Economic Forum.
JPMorgan Chase CEO Jamie Dimon once again found some controversy. In an early session, he clashed openly with Paul Singer, the head of hedge fund Elliott Capital Management, and others. Singer accused big banks of "completely opaque" disclosures, which makes it hard to judge which banks are risky and which are sound, reports the Financial Times.
Dimon responded that "JPMorgan's accounts were clear, adding: 'With all due respect hedge funds are pretty opaque too.' However, Mr. Singer's points have become a common criticism among both hedge fund and institutional investors and they add to pressure on banks to disclose better quality information about their balance sheets. Mr Singer noted that derivatives positions, in particular, were difficult for outside investors to parse and worried that banks did not always collateralize their positions. Mr Dimon said the bank did for all 'major' clients. Mr Singer retorted: 'Well, we're a minor client then.'"
This debate has grown a little tiresome, though it remains important. After all the regulation passed in the wake of the financial crisis, it would appear that banks might be a less opaque but not dramatically so. I can only hope Dodd-Frank has allowed regulators to have a better window into market-wide financial risk, which was so lacking in 2008.
- here's the article
Bankers less defensive at Davos