Columbia letter against Jamie DIMON on Fed

LETTER TO PRESIDENT BOLLINGER

 

Mr. Lee Bollinger

President of Columbia University

Office of the President

202 Low Library

535 West 116th Street, Mail Code 4309

New York, NY 10027

Dear President Bollinger,

As faculty, alumni and students of Columbia University, we are writing to express our deep disappointment in your recent decision to support JPMorgan Chairman and CEO Jamie Dimon’s continued membership on the Board of the New York Federal Reserve Bank. 

 

As the Chairman of the Board of the New York Fed, your unambiguous duty - as stated by the Guide to Conduct – is to maintain “the integrity, dignity, and reputation of the Federal Reserve System . . . and to avoid actions that might impair the effectiveness of System operations or in any way tend to discredit the System.” 

 

By supporting Mr. Dimon’s tenure you abdicated this basic responsibility.  By echoing Mr. Ben Bernanke’s remarks that it is up to Congress to address this problem, you denied your duty to ensure the integrity of the Fed.  By stating that Congress has more pressing to address than this one, you, in essence, urged inaction by all parties capable of affecting this important change.  Surely you understand that a functioning financial system is a pre-requisite of our country’s economic recovery.  By characterizing those who wish to see Mr. Dimon resign as “foolish” and in possession of a “false understanding” of how the Fed works, you have added insult – and inaccuracy – to the injury of encouraging this institution to continue in its current form.

 

It is worth reminding you that JPMorgan Chase is currently under investigation for its recent $3 billion trading loss – a loss Mr. Dimon initially denied and then characterized as a ‘tempest in a teapot’.  It may also bear repeating that Mr. Dimon has long campaigned aggressively against important regulatory reforms designed to prevent excessive risk taking by Too Big To Fail institutions – institutions the Federal Reserve saved with $3 trillion dollars in special lending facilities and which Congress bailed out with $700 billion of taxpayers’ money.  Certainly Mr. Dimon has no place as a leader of this institution. 

 

We urge you to reverse your support for Mr. Dimon and call for his immediate resignation.  By way of reminder, there is precedent for this kind of action.  In April 2011, Jeffrey R. Immelt, CEO of General Electric, stepped down from the NY Fed after it was clear that GE Capital would be regulated by the Fed as a ‘systematically important’ financial institution.  As one of the largest banks in the world, JP Morgan is similarly – if not more ‘systemically important.’

 

As an educator, you have a special responsibility to demonstrate moral and intellectual credibility, something you have failed to do in this situation.  As the president of a university, you have a responsibility to ensure that students have the best possible opportunities upon graduation.  Surely you understand the connection between the unemployment crisis facing young people in America and the 2008 financial collapse.  That collapse not only threatened the employment potential of millions of American students, but also risked the fiscal health of the parents and grandparents who co-signed their educational loans.  That you would choose to uphold the interests of major financial institutions over students and their families is unimaginable.  We certainly hope that the contributions made to Columbia by JPMorgan – sums north of $500,000 – had nothing to do with your decision.

 

Three years after the biggest financial crisis since the Great Depression, the country is struggling to rebuild its economy.  A stable and appropriately governed financial system is a critical pre-requisite of our recovery.  As the Chairman of the NY Fed, we urge you to take the obvious step of demanding Mr. Dimon’s resignation.

 

Thank you,

Current Students, Alumni and Faculty of Columbia University