On Change.org, a Big-Name Call for Dimon's Ouster from New York Fed
BY Sarah Lai Stirland | Thursday, May 24 2012
The International Monetary Fund's former Chief Economist Simon Johnson is using Change.org to build support for his position that JP Morgan Chase CEO Jamie Dimon must resign from the board of the Federal Reserve Bank of New York.
Johnson, a British economist who's a longtime professor at MIT, established the petition on Wednesday. Since then, more than 3,000 people have signed on to support his position.
(For more background on Change.org and how it's grown over the past couple of years, read Micah Sifry's May 15 feature on the company.)
Johnson's petition reads:
Jamie Dimon is CEO of JP Morgan Chase, one of the largest and most powerful banks in the world. Because the bank is "too big to fail", it receives implicit backing from US taxpayers. Mr. Dimon has a special responsibility to safeguard the bank's health -- not just for the sake of his shareholders, but for the public good.
Mr. Dimon failed in that duty when he personally approved a very risky approach to trading, with the potential to destabilize world financial markets. It was never a matter of whether this highly leveraged gambit would fail -- it was a matter of when it would fail and what would be the scale of the final damage.
Jamie Dimon was taking risks with depositors' money, which is backed by the Federal Deposit Insurance Corporation. He was also playing dice with all of our futures. And it should come as no surprise that as Congress and regulators work on rules regulating the financial industry, JP Morgan Chase leads the lobbying campaigns to maintain the right to carry out the kind of maneuver that recently caused the bank to lose billions.
Despite all this, Jamie Dimon sits on the board of directors of a key institution charged with keeping JP Morgan Chase closely supervised – the Federal Reserve Bank of New York.
The bankers who run big Wall Street firms feel they can act with impunity because there's no real accountability; the foxes are guarding the proverbial henhouse. It is not acceptable to have Mr. Dimon involved in overseeing the management of the New York Fed, an organization that oversees his activities, decisions, and potential losses. There need to be real consequences for bankers who act recklessly with other people's money.
That accountability starts here. Jamie Dimon must immediately resign his post at the New York Federal Reserve Bank. If he will not, then the Federal Reserve System should take whatever action is needed to remove him immediately from that position.
Tim Geithner (Treasury Secretary) and Elizabeth Warren (candidate for the Senate in Massachusetts) are both calling for Jamie Dimon to resign his New York Fed board position. Even so, Jamie Dimon is one of the best connected bankers in the country and won't give up this valuable post without a fight.
If thousands of Americans stand up to Dimon and demand his removal, the Federal Reserve System will be forced listen. To ignore this reasonable request, increasingly being heard across the political spectrum, would risk the legitimacy and effectiveness of the entire Federal Reserve.