Should Jamie Dimon resign from NY Fed bank?
In the aftermath of the multi-billion trading fiasco, Elizabeth Warren, the mother of the CFPB and a candidate for Senate, Tim Geithner, Treasury Secretary, Sen. Bernie Sanders and others have called on Jamie Dimon to step as a director of the New York Federal Reserve Bank.
Optically speaking, it sure looks like the CEO of JPMorgan has a tough position to defend.
"The conflicts of interest are so apparent that they're laughable," Sanders told CNN. "Here you have the Fed, which is supposed to regulate Wall Street. Then you have the CEO of the largest Wall Street company on the board which [it] is supposed to be regulating. This is the fox guarding the henhouse."
How can this happen?
As CNN notes, the arrangement by which a CEO of a top banks ended up on the regional fed bank board stretches back to 1913. The law requires that three of nine members who serve on the board must be bankers from the region covered by the bank. The other six must represent the public. Dimon serves as a bank representative along with CEOs from Banco Popular de Puerto Rico and Solvay Bank, a small bank based near Syracuse, N.Y. The board is not a typical board in that the head of the bank formally reports to it. Instead, it's more like an advisory board, Dimon has noted.
The issue is likely to blow over soon, as Dimon is scheduled to rotate off in December. My guess is that he will serve out his full term. If he were to rotate off early, it could be seen as a gesture of conciliation with his critics, but some might see it as mere capitulation in the face of pressure, a show of weakness.
Calls for Dimon resignation from NY Fed bank board