James Moore: We must not miss this chance to rein in the banks
JP Morgan's bankers were supposed to be the industry's golden boys. The people who didn't mess up like everybody else did during the financial crisis. Who showed the way things ought to be.
Except now they have messed up. Royally. And by placing bad bets in the financial casino that everyone thought had closed.
Now it really has to be closed, once and for all.
If ever regulators needed justification for their crackdown, the fact that even a bank as (supposedly) well-run as JP Morgan can make a huge horlicks of things has provided it.
What makes it even better is that it is JP, and its hubristic boss Jamie Dimon, who have been the ones demanding that the watchdogs back off, claiming that they will damage economic growth if they don't.
Mr Dimon has gone so far as to call the Basel III capital rules "anti-American" (as if socialising your losses wasn't) and implied that the Volcker rule, supposed to bolt the casino's doors, will be a disaster.
In his view, it seems, regulators just don't get it. Except that maybe it's Mr Dimon who just doesn't get it.
His thesis is that less profitable banks, hamstrung by demands to hold huge reserves of capital to cover them in the event of a fresh crisis, will be less able to lend money and drive economic growth.
This may be true, although one very obvious way for banks to free up capital for lending would be to pay their masters of the universe less.
But even if it is true, the price has to be worth paying because the benefit will be a more stable banking system. A banking system that won't in future send the world's economy into the sort of tailspin created by the financial crisis, and that won't force ordinary taxpayers who don't enjoy the benefit of multimillion-dollar salaries to pay the price.
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