JP Morgan chief executive Jamie Dimon has said the London Whale responsible for a $5.8bn trading loss has been "harpooned", as he defended the role of big banks in society.
In an interview with New York Magazine , he blasted the backlash against bankers, calling himself "an outspoken defender of the truth" and angrily reminding the journalist that America is a "free f----ing country".
But Dimon, who has led the bank for seven years and was paid a record $49.9m in 2007, has insisted that people have forgotten that the good things banks - especially big banks - can do often filter down to consumers.
“There are huge benefits to size,” he said. “We bank Caterpillar (NYSE: CAT - news) in like 40 countries. We can do a $20bn bridge loan overnight for a company that’s about to do a major acquisition. Size lets us build a $500m data centre that speeds up transactions and invest billions of dollars in products like ATMs and apps that allow your iPhone to deposit checks. We move $2 trillion a day, and you can see it by account, by company. These aren’t little things. And they accrue to the customer. That’s what capitalism is.”
It was arguably the size of JP Morgan that allowed a trader in the chief investment office in London to rack up losses of $5.8bn without anyone raising the alarm. Bruno Iksil (AKA the London Whale) has since left the bank, along with Ina Drew, the 30-year JP Morgan veteran who ran the unit.
Dimon hoped the departures, along with two other traders, would draw a line under the matter. But at a recent Q&A session with hundreds of summer interns, he was repeatedly accused of being in a business that was responsible for much of the world's misery.
“Before you go to the next level of generalizing, saying, ‘all bankers’, ‘all banks’. I don’t like that,” Dimon said. “I don’t buy this thing that our industry is responsible for all the ills of the world. We have great people at JP Morgan Chase. We operate with a lot of rigor. Our clients are happy with us.
"Sure, we make mistakes, like we have got this Whale thing. Businesses make mistakes. So we’ve got to clean them up, learn from them, and get better. And I want you to know the London Whale issue is dead. The Whale has been harpooned. Dessicated. Cremated. I am going to bury its ashes all over.”
However, he told New York Magazine that far from being resolved, the London Whale had a "tail", meaning that the repurcussions are still being felt, as the losses grew from $2bn, to $3bn, to almost $6bn.
“It was the dumbest thing I have ever seen,” Dimon admitted. “It was so complex, so large, so illiquid, so stupid. It didn’t get the rigor that it should have entailed."
Despite his recent insistence that it was a major event, at the time he famously shrugged off the matter as a "tempest in a teapot", a comment he now admits was "stupid".
“I had been told a whole bunch of stuff that made me think it was a tempest in a teapot," Dimon said. "There was a moment of, I can’t believe what we have. I saw it all pass in front of my eyes. I saw the headlines, the investigations, the uproar, the breathlessness. ‘Dimon Loses Luster’, ‘Dimon in the Rough’.
"I told everyone, ‘This is going to be bad, it’s going to go on, and we can’t get out of it. So put your jerseys on: We’re going to wrestle this thing down and fix it'."
“We had to review thousands of e-mails, minutes of tapes. We cleaned up the risk. It scared the daylights out of our people. We crossed the t’s and dotted the i’s and put in new rules, and we’re fine.”
And Dimon returns to the sheer size of JP Morgan - the largest bank in the US by assets - for the reason that his bank is "fine".
"It’s such a large number, but if you put it in perspective a little bit, if you had a $100m market-cap bank that made something like $3m that quarter and lost $3m, you wouldn’t even talk about it. That’s what this was. We didn’t even lose money this quarter. We earned $5bn. The analysts estimate us having a record year.”
Dimon hammered home these profits as an example of honest bankers working hard to create an institution that became a "port of safety" in the financial storm of the past few years. JP Morgan is among the banks that not only survived the crisis in relatively good shape, but benefited from it by buying failed investment bank Bear Stearns (NYSEArca: BSC - news) and Washington Mutual (Xetra: 893906 - news) .
“Everyone is talking about the culture, the culture, and all that, and it’s just not true,” Dimon says. “Most bankers are decent, honourable people. We’re wrapped up in all this crap right now. We made a mistake. We’re sorry. It doesn’t detract from all the good things we’ve done. I am not responsible for the financial crisis.
"I hate to tell you. We were a port of safety in the storm. I find it unbelievable that that is the general theme - that you have to walk in a room and act like you are responsible for things you are not responsible for.”
Howver, it is obvious that the public do still hold him responsible. Five members of Occupy Our Homes DC temporarily silenced former the chief executive while he stood in front of a Congressional hearing in June. They chanted and loudly accused Mr Dimon of being a crook.
“I’m an outspoken defender of the truth,” he told New York Magazine . “Everyone is afraid of retaliation and retribution. We recently had an event with a hundred small bankers here, and 85pc of them said they can’t challenge the regulation because of the potential retribution. That’s a terrible thing. Okay? This is not the Soviet Union. This is the United States of America. That’s what I remember. Guess (NYSE: GES - news) what. It’s a free. F---ing. Country.”