"Will the London Whale swallow Jamie Dimon?" asked John Cassidy at The New Yorker. The CEO of JPMorgan Chase is in hot water after a Senate subcommittee report revealed last week that he had signed off on risky deals made by a trader known as the "London Whale." Dimon also "misled investors and the public" about the trades, which cost the bank $6 billion last year. The Justice Department and the FBI are ramping up an investigation of the case, and while Dimon himself isn't suspected of any criminal wrongdoing, "there can be no doubt that his career is on the line." Dimon has long been Wall Street's golden boy — "the magazine-cover star who, when many of his rivals were crashing and burning during the financial crisis, guided his bank through it all, mostly unharmed." A federal indictment could quickly change all that. "If the feds were to indict any senior JPMorgan executives on charges arising from the Whale's trades," the banking star's "position could rapidly become untenable."
So much for the reign of "Good King Jamie," says Heidi Moore in Britain's Guardian. Dimon has long been seen as "the statesman of the financial sector." Although he denied having much personal knowledge of how the London Whale trades occurred, he reacted to the crisis swiftly and apologetically. His pay cut last year — reducing his bonus in half, to $11.5 million — "showed that Dimon was willing to take the pain like everyone else." But testimony last week by other bank officials left chinks in his armor. Their accounts of his bullying, panicking, and willful "misleading of regulators and the public" make Dimon look bad. "It changes the narrative significantly to see that he engaged in bad behavior himself."
But Dimon is "unlikely to face a serious threat to his power," say Ben Protess and Jessica Silver-Greenberg in The New York Times. Yes, the Senate report has placed "an uncomfortable spotlight" back on him, leaving some investors and members of the bank's board frustrated with his "off-putting arrogance." But Dimon still has cozy relationships with several important power players, including Sen. Elizabeth Warren (D-Mass.) and Treasury Secretary Jacob J. Lew. JPMorgan is likely to stick by Dimon's side too. His contrition in the face of the London Whale losses looked genuine, and more importantly, 2012 was the bank's most profitable year ever. "So long as JPMorgan continues to perform, I assume he will have the board's support," said Sheila C. Bair, a former head of the Federal Deposit Insurance Corp. "Given the size and complexity of JPMorgan's operations, what would their alternatives be?"
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Nothing is going to happen, says Jesse Eisinger at ProPublica. Dimon's bank "repeated the same misdeeds that other banks successfully pulled off at the height of the financial crisis," and regulators are still asleep at the wheel. For years, they've averted their eyes "from rotted bank assets and rotted bank morals; why would JPMorgan expect any different reaction in this case?" Even if this report "puts pressure on regulators to finish a simplified and loophole-free Volcker Rule, which would prohibit banks from making bets for their own profit using taxpayer-backed money," there's no reason to have even "the slightest confidence" that big banks — or regulators — will play fair.
Continue reading for free
We hope you're enjoying The Week's refreshingly open-minded journalism.
Subscribed to The Week? Register your account with the same email as your subscription.