Like Lloyd Blankfein with the Abacus fiasco, and Jamie Dimon with “the whale trade,” Barclays CEO Bob Diamond has an unparalleled opportunity to surprise us this week during his appearance before Parliament to explain the most recent financial scandal involving the systematic manipulation of LIBOR, the benchmark interbank lending rate upon which hundreds of trillions of dollars of financial transactions are priced, over several years. Will Diamond seize the opportunity missed by both Blankfein and Dimon to emerge as the first true financial statesman of the modern global banking crisis?
JPMorgan CEO Jamie Dimon will today, once again, stand before the authors of Dodd-Frank and attempt to make the case for why a $2 billion trading loss was a stupid mistake, not a willful breach of at least the intent of the law. Our representatives who wrote the law should hold him to the standards set by JPMorgan’s own Code of Conduct: following the spirit and intent, not just the letter, of the law.
When Mr. Dimon’s predecessor J.P. Morgan Jr. was called before the Senate in 1933, he spoke humbly of a banker as a member of a long-standing profession for which there had grown a code of ethics and customs, “on the observance of which depend his reputation, his fortune, and his usefulness to the community in which he works.”
Much has been written about the trading—not hedging—debacle at JPMorgan. Jamie Dimon’s mea culpa is intended to head off deeper questions. No cover-up on his watch—get out in front, be direct, deal with it, move on. Right? Not so fast.