Jamie Dimon, the savior of the JPMorgan crisis

In 2008, in the most disastrous economic climate of Wall Street’s history, Jamie Dimon weathered the storm more deftly than any other executive. While other competitors watched their companies crumble. Working as chairman and CEO of JPMorgan Chase in the midst of the storm, Dimon not only survived, but even made a great billionaire profit.

Chase Tower_J.P.Morgan_Patrick Dwyer
Image courtesy of Kristen Cavanaugh at Flickr.com

“If I grow earnings and the branches are expanding, and I provide a lot of jobs, that’s what really matters. The rest is BS.” 

Jamie Dimon was born on March 13, 1956, in New York City.

He is of Greek descent, and finance runs in his veins. Both his father and grandfather were stockbrokers at Shearson, a series of investment banking and retail brokerage firms. He grew up splitting his time between a Park Avenue apartment and the suburb of Larchmont in New York State’s affluent Westchester County. He attended public school and was a decent enough student to get into university but not strong enough to be accepted to his top pick.

He majored in psychology and economics at Tufts University. During one summer’s break from Tufts, he worked at Shearson. After graduating, he worked in management consulting for two years before enrolling at Harvard Business School, along with classmates Jeffrey Immelt, Steve Burke, Stephen Mandel and Seth Klarman. During the summer at Harvard, he worked at Goldman Sachs. He graduated in 1982, earning a Master of Business Administration degree as a Baker Scholar. In 1983, Dimon married Judith Kent, whom he met at Harvard Business School. They have three daughters: Julia, Laura, and Kara Leigh. After graduate school, Dimon went to work for Sandy Weill, a friend of the family who would become his mentor. From 1982 to 1985, Dimon was Weill’s assistant at American Express.

Creating a name for himself

In 1985 Dimon had just quit American Express to follow his mentor Sandy Weill to Commercial Credit, a struggling lending business in Baltimore. Dimon worked at turning the business around by cutting costs while Sandy sought out new businesses to merge with. After every sale, the business grew both in size and number of offerings, and Dimon found money to pay down the debt and acquire something new. By 1998 Commercial Credit had taken over Primerica, Smith Barney and Salomon Brothers when it merged with Travelers Group to form Citigroup Inc. Citigroup soon became the biggest bank holding company in the world. The business structure allowed for fantastic cross-selling opportunities and it was a one-stop-shop for a customer’s banking needs from cradle to grave.

In the spring of 1998, a merger between Travelers and Citicorp resulted in the formation of Citigroup, company that would go on to become a massive banking corporation. Dimon became the president of Citigroup, but he would not stay in his new position for long. Personal friction with Weill, resulting from a number of factors, among them Weill’s resentment of Dimon’s growing stature, led to Dimon being asked to resign in November 1998.

The Wall Street_patrick dwyer_Jamie Dimon_JPMorgan
Image courtesy of Butz.2013 at Flickr.com

The savior of the JPMorgan Chase

The next job he took, in 2000, was as the chairman and CEO of Bank One, a Chicago institution that was experiencing financial difficulties. In the next three years he worked in the bank’s balance sheets, and finally he managed to fix them. In 2004, he influenced Bank One into a merger with JPMorgan Chase. Then, Dimon became the president and chief operating officer of JPMorgan Chase after the merger, and he stepped in as CEO in 2006. A year after that, he was also chairman of the board.

Patrick Dwyer also recommends “JD Rockefeller: The Dawn of a Corporate Empire” https://patrickjdwyer.wordpress.com/2016/05/14/j-d-rockefeller-the-dawn-of-a-corporate-empire

The crisis started with the folly of the financiers. The years before the crisis saw a flood of irresponsible mortgage lending in America. Loans were doled out to “subprime” borrowers with poor credit histories who struggled to repay them. These risky mortgages were passed on to financial engineers at the big banks, who turned them into supposedly low-risk securities by putting large numbers of them together in pools. But this proved to be a wrong decision. Starting in 2006, America suffered a nationwide house-price slump and by 2008, it was a credit crisis. JPMorgan Chase came out of it relatively unscathed. The bank´s profitability in 2008 has been credited with two major decisions that Dimon had a part in: First, the bank had sold its only structured investment vehicle in 2005. Second, the bank had only limited exposure to collateralized debt obligations. Under Dimon’s leadership, JPMorgan Chase also acquired Washington Mutual to become the largest bank in America.

Dimon faced a different problem in 2012 in a case called the “London Whale”: a $6 billion trading loss involving the firm’s London arm. JPMorgan Chase agreed to pay approximately $1 billion in regulatory fines after the incident. Dimon himself was issued a pay cut due to the losses. In November 2013, JPMorgan Chase entered into a $13 billion settlement with government regulators. Despite these challenges, in January 2014 he received a 74% rise in his pay over his 2013 salary and remained in control of JPMorgan.

Follow the link to learn more about the history of JP Morgan: 

https://www.jpmorgan.com/country/US/EN/company-history

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