To understand the current climate in the United States, you must go back to when the nation's bankers, chastened by their complicity in a financial crisis that wrecked the economy, stepped up and embraced new laws and regulations to ensure it would never happen again.
Ha! So funny! No, the latest headlines are a reminder that the bankers of the United States are insufficiently grateful that in most other countries, their banks would have been nationalized and many would have ended up in jail – or at least unemployed.
In the first news item, courtesy of the Wall Street Journal, the headline says it all: "Big Banks Push Back Against Tighter Rules." The banks, the paper said, have hired several veteran lobbyists "to fend off growing efforts in Washington to rein them in."
Says the Journal: "Regulators and lawmakers increasingly are signalling that more work is needed to lessen the risk posed by large, complex banks, including bigger capital cushions and minimum amounts of expensive long-term debt."
The bankers, apparently, disagree. In April, CEOs of five large banks met to discuss the growing regulatory threat. They handed it of to a trade group that is blitzing lawmakers with the message that increased capital levels mean less lending.
(It would probably help their cause if, as two analysts at the Federal Reserve Bank of Dallas recently put it, they had not "helped overheat the economy and then helped overcool it.")
In another bit of news, Jamie Dimon, the chairman and CEO of JPMorgan Chase & Co., is facing a nonbinding shareholder vote as to whether his company should separate his two jobs in the name of better governance.
The proposal would be valid at any time, but it is more appropriate, shall we say, in light of recent events: The bank had an embarrassing multi-billion-dollar loss courtesy of inadequately managed traders.
Mr. Dimon lost half of his annual bonus; he did not have to forfeit his CEO job. It seems, however, that he views the chairmanship and CEO roles as part and parcel of what is required to keep him at the helm of the company. The Wall Street Journal reported last week Mr. Dimon raised the possibility he might leave if the board decided to separate the jobs.
The Journal quoted Nomura Securities banking analyst Glenn Schorr, who organized the meeting, as saying "Someone asked what the downside was if the vote goes to split it and [Mr. Dimon] said 'one thing would be I might leave.'"
Mr. Dimon has, generally, been an enlightened leader at JPMorgan. (He is, after all, what passes for a Democrat on Wall Street.) But he has also been part of the great regulatory pushback. Or, perhaps we should say, the leader of the pack that just doesn't get it.