Academic journal article ABA Banking Journal

Are We Overreacting Here?

Academic journal article ABA Banking Journal

Are We Overreacting Here?

Article excerpt

When the news came out last month about J.P. Morgan Chase's $2 billion trading loss, you just knew what was going to follow. Even Chase CEO Jamie Dimon acknowledged as much. And so in a way the waves of shock, outrage, finger-pointing, "I told-you-so's," investigations, hearings, etc., isn't too surprising. It's a testimony to how inured we've become to the politics of extremes. But that doesn't mean it's acceptable.

Contrast the treatment received by General Motors over safety issues with its Volt electric car some months ago (batteries caught fire following a crash test) with that received by Chase. Both companies are giant corporations-leaders in their fields. Both received government support through TARP. But there the similarities end.

General Motors filed for bankruptcy. Having reorganized with new management, it is profitable again, but the government remains its largest shareholder.

Chase took TARP money at the government's insistence, and paid it back early. But the bank was--most would concur--the strongest of the large banks during the financial crisis. In fact, the bank worked closely with the government in acquiring two very large failing institutions. Its ability to accomplish this at a critical juncture helped stabilize the system.

No matter. To hear the chorus of critics in Washington, the media, from consumer groups, and elsewhere, you'd think the bank had deliberately sabotaged the GNP. For weeks now, almost daily, have come calls for more rules, asset-size caps, reinstatement of Glass-Steagall, toughening of the already complex Volcker Rule, banning bankers from serving on Federal Reserve Bank boards, and on and on. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.