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Jamie Dimon, the chief executive of JPMorgan Chase, during a hearing on Capitol Hill about financial markets, in Washington, April 3, 2008.Doug Mills/New York Times

"Tied to thee, thou damned whale!"

That's Captain Ahab in Moby Dick, but it could also be what Jamie Dimon, the chief executive of J.P. Morgan Chase & Co. is thinking these days.

The so-called "London Whale" trading fiasco cost J.P. Morgan $6.2-billion (U.S.) last year. And now it's taking a nice bite out of Mr. Dimon's paycheque.

The bank announced today that Mr. Dimon's compensation for 2012 will be slashed by half compared to 2011 – to $11.5-million from $23-million – to reflect his ultimate responsibility for the trading losses.

The pay cut takes Mr. Dimon out of the running for the title of best-paid chief executive on Wall Street, a crown he has worn in recent years.

Certainly there is something to applaud here: the bank's board held its chief executive Mr. Dimon responsible for the blunder in the only way that really counts, namely by reducing his bonus. It's hard to recall another major bank voluntarily doing the same, despite the scandals and missteps that have plagued the industry in recent years.

The bank also made public two internal reports related to the fiasco, which erupted last year after a U.K. trader name Bruno Iksil (the London Whale) amassed a giant bet in credit derivatives that finally imploded. One of the reports, 129 pages long, provides a glimpse inside the bank's failure to manage trading risks.

Releasing the report is another commendable move, although its conclusions feel slightly too convenient: most of the blame for the mistakes, it says, lies with executives who have already left the bank.

As far as criticism of Mr. Dimon goes, the report says its findings "are consistent with the conclusions he himself reached," then quotes some of Mr. Dimon's earlier mea culpas ("These were egregious mistakes. They were self-inflicted … This is not how we want to run a business.")

It makes only one mild addition: Mr. Dimon "could have better tested his reliance on what he was told" by his senior managers as the trading losses began to escalate, the report said.

Long considered one of the savvier bankers in the business – if not the savviest – Mr. Dimon is both chief executive at J.P. Morgan and chairman of its board (in other words, there will not be any Citigroup-style coup where the board fires the chief executive).

And that raises questions about just how independent the bank's board can be. On a conference call to discuss the bank's quarterly earnings earlier today, Mr. Dimon said that the board considered the matter of his compensation in his absence.

"The board had to look at the positives, which I think are large, and the negatives," Dimon said, according to Bloomberg News. "This is one huge embarrassing mistake and I respect their decision."