NEW YORK, March 18, 2023 (BSS/AFP) - Consulted by policymakers and able to
nudge his peers into action, JPMorgan Chase CEO Jamie Dimon played a key role
in a bank rescue effort this week -- a situation sparking reminders of 2008.
Following the swift collapse of Silicon Valley Bank and Signature Bank, there
have been fears that regional lender First Republic Bank could be the next
domino to fall -- despite moves by agencies like the Treasury Department and
Federal Reserve to assure SVB and Signature's depositors.
While First Republic is not yet out of the woods, it was given a lifeline on
Thursday as 11 major US banks pledged to deposit $30 billion into the lender.
And Dimon, 67, played an important role in the plan.
He spoke on the phone this week with Treasury Secretary Janet Yellen and Fed
Chair Jerome Powell, as the leaders sought to find a way to boost confidence
in the financial system, according to three sources close to the discussions.
- 'Revered' by peers -
As the crisis unraveled last Friday with SVB closed down by the authority,
threatening contagion, Dimon also met in his office with Deputy Treasury
Secretary Wally Adeyemo, according to the New York Times.
On Sunday, authorities set out plans to ensure SVB customers would be able to
access their deposits, while the Fed introduced a new lending tool for banks
in an effort to prevent a repeat of SVB's quick demise.
President Joe Biden sought the day after to reassure Americans that the
banking system is safe, but the situation remained fragile.
Yellen raised the idea of major banks stepping in together, said a source
familiar with the matter.
But it took the efforts of both Dimon and Yellen, from Tuesday to Thursday,
to persuade CEOs to come on board and deposit billions of dollars into First
Republic to shore up the bank.
Bank of America, Citigroup and Wells Fargo first came on board, followed by
During the process, White House chief of staff Jeff Zients and National
Economic Council director Lael Brainard were kept informed, the source said.
Dimon is "revered by his peers," said Yale School of Management professor
"He speaks with expertise, authority and rare clarity," Sonnenfeld said,
adding that Dimon has been in the industry for a long time.
Dimon, who has led JPMorgan since 2005, is the last remaining boss of a major
bank still in place after the 2008 financial crisis.
"Nobody else has that authority, that credibility," he said. "Everybody takes
Jamie Dimon's phone calls, especially in the world of finance."
- Echoes of 2008 -
Dimon, who helms the largest US bank by assets, also came to the rescue in
the 2008 financial crisis by buying Bear Stearns and some assets of
Under his leadership, JPMorgan Chase weathered the crisis better than many
While the acquisitions helped JPMorgan grow, they also earned a flurry of
complaints from authorities and shareholders relating to toxic financial
products recovered in the process, along with billions in legal costs.
Dimon himself has come to rue the Bear Stearns deal.
While there was no question this time of taking over a troubled bank, Dimon
met with Yellen on Thursday afternoon after her appearance at a Senate
The aim was to discuss the final details of a plan that would eventually see
11 major banks put together deposits of $30 billion into First Republic.
Despite the latest lifeline, shares of First Republic remained down by around
33 percent at 1930 GMT, signaling lingering worries over the financial