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Jamie Dimon leaves New York Fed board as term expires

January 07, 2013|By Andrew Tangel
  • Jamie Dimon, chairman and chief executive of JPMorgan Chase, talks to an assistant during a Senate Banking Committee hearing in Washington in June.
Jamie Dimon, chairman and chief executive of JPMorgan Chase, talks to an… (Andrew Harrer/Bloomberg )

Jamie Dimon, the chairman and chief executive of JPMorgan Chase & Co., has quietly left the board of the New York Federal Reserve.

Dimon didn't relinquish his board membership to silence critics who, in the middle of last year, saw a conflict of interest -- or at least an appearance of one -- after JPMorgan suffered an embarrassing loss in a risky bet, despite the New York Fed's oversight.

"This is a clear example of the fox guarding the henhouse," Sen. Bernard Sanders (I-Vt.) said in May after Dimon revealed a derivatives bet by a trader nicknamed "the London Whale."

The bet wound up costing about $6 billion. It was a black eye for a bank that emerged from the financial crisis practically unscathed.

Elizabeth Warren, a Wall Street critic who is now a Democratic senator from Massachusetts and will sit on the Senate Banking Committee, also had called on Dimon to step down.

But Dimon -- who said all along that his role on the board was merely advisory and came with no oversight over the Fed's regulatory functions -- finished out his second term, which expired at the end of 2012.

New York Fed board members customarily step down after serving a maximum of two terms.

Three positions on the New York Fed's nine-member board are nominated by member banks. These "Class A" directors do not play a role in selecting the New York Fed's presidents or its regulatory decisions, according to the New York Fed.

Dimon's replacement has not been announced. The remaining two bank executives on the New York Fed's board are Richard Carrion, chairman and CEO of Banco Popular de Puerto Rico, and Paul Mello, president and CEO of Solvay Bank in New York.

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