Susanne Posel, Contributor
Jamie Dimon, CEO of JPMorgan Chase & Co. is a serving member of the board of the Federal Reserve Bank.
Dimon was given his seat on the Fed’s board in 2007. He has enjoyed his position throughout the financial crisis that his and several other mega-banks have caused through irresponsible behavior on the global stock market.
Dimon is not the only banking executive to serve two masters.
Along with Dimon, the New York Fed board includes CEO’s from Banco Popular de Puerto Rico, Solway Bank, heads of Macy’s Department Store, the Metropolitan Museum of Art and representatives from Columbia University.
Senator Elizabeth Warren wants to see Dimon resign from the Federal Reserve Board. She told CBS, “I’d like to see Jamie Dimon, for example, resign from his position as a Class A director of the New York Federal Reserve Bank. The banks cannot regulate themselves.”
Senator Bernie Sanders, who has been calling for a revision of the Fed, told CNN’s Wolf Blitzer:
The conflicts of interest are so apparent that they’re laughable. Here you have the Fed, which is supposed to regulate Wall Street. Then you have the CEO of the largest Wall Street company on the board which [it] is supposed to be regulating. This is the fox guarding the henhouse.
The Federal Reserve Act of 1913 states that bankers should hold seats on the Fed’s regional boards. This addition was meant to allude to some semblance of decentralization of the Fed’s board members; however the clause has only served to bring the corruption closer to home.
The Federal Reserve Bank was divided into 12 regional banks led by an appointed president and 9 board members.
The members of the board had to be bankers from the region who were considered “Class A”, while other members would supposedly represent the public’s interests in agriculture, commerce, industry, labor and consumer goods.
Throughout the years, the Federal Reserve Boards have consistently neglected to accurately document the roles and responsibilities of their board members.
The Government Accountability Office (GAO) released a report that showed cases where Stephen Friedman, then chairman of the NY Fed’s board of directors, possessed massive amounts of shares in Goldman Sachs; which was considered a perk from the Wall Street bailouts.
Friedman, who later resigned from the board, had purchased shares in Goldman Sachs through an automatic stock purchase program.
Earlier this month, Dimon tried to downplay JPM’s recent loss of $2 billion as a “mistake”.
A JPM trader based in London, who is a derivatives expert, placed bets that corporate debt was becoming less of a risk under the false supposition that corporations are becoming financially stronger. Based on a lie, this trader would benefit from any movement on the index. The result was a substantial loss for JPM.
Dimon wants the American public to think of this bet as a hedge; however, hedges actually reduce risk. Hedges make money while investments lose money to cover the losses.
Because of the pressure and publicity of this incident, as well as the flippant demeanor of Dimon, the shareholders of JPM have filed suit against Dimon in a New York Federal Court.
They cite the $2 billion loss as the purpose of their legal action.
Dimon’s behavior shows a man who simply does not have the capacity to display empathy for his role in the destruction of our financial market.
His position on the Federal Reserve Board is a gross conflict of interest.
Susanne Posel is the Chief Editor of Occupy Corporatism. Our alternative news site is dedicated to reporting the news as it actually happens; not as it is spun by the corporately funded mainstream media. You can find us on our Facebook page .