Thursday, October 17, 2013
The US government is trying public shaming to control business behavior, especially on Wall Street. It is too early to know whether it will work, or even if it is fair. The present victim of the regulatory stockade is JPMorgan, which can't apologize enough for its rogue trader, dubbed the London Whale. Jamie Dimon, the CEO of Morgan, must feel like a punching bag. His company has paid nearly a billion in fines for trading errors that cost the bank a billion. That is enough to take a bite from earnings. It is clear that regulators have determined to make an example of Dimon who was the star of the financial meltdown five years ago when he kept his bank out of the trouble that sank other financial institutions. Dimon didn't get long to ride high before the error occurred on his watch. Is the government unfair and too harsh in its treatment of Morgan? Probably, but there is no pressure to moderate the self-righteousness of bureaucrats.