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Book review: Last Man Standing

Tait Simpson looks at one of the great survivors of the financial crisis
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Bankers make for easy targets these days. Rarely a day goes by without politicians or the public looking to punish bankers for the largest economic slowdown since the Great Depression of the 1930s. Financiers whose reputations have been enhanced by the crisis are few and far between, although there certainly have been some. Top of the list of people whose standing in the industry has been elevated is the chief executive of J.P. Morgan Chase, Jamie Dimon - the subject of this new biography by Duff McDonald.

McDonald draws on interviews with Dimon's family, friends, old teachers and industry insiders (including Warren Buffett) to create a vivid account of the life of one of Wall Street's most influential executives. Dimon became CEO of J.P. Morgan Chase in mid-2004. The firm quickly became one of the industry's premier banks - it regularly topped the league tables in revenue generated through its investment banking division.

The description of Dimon's younger years is often amusing. It offers a picture of a man whose ambition sometimes came across to others as an attitude problem. Some colleagues found him to be a "hothead", prone to storming out of rooms or undercutting managers he deemed ineffective. Yet Dimon's management style, which prioritises attention to the smallest details and tries to avoid office politics, elicits a loyalty from his staff that is rare in the industry.

After graduating from Harvard Business School, Dimon turned down job offers from investment banks, opting instead to work for Sanford Weill at American Express. Dimon was Weill's right-hand man for 15 years. Dimon and Weill perfected the strategy of acquiring smaller financial institutions and integrating them to create ever-larger banks. They completed no fewer than five major acquisitions before finally merging their company, Travelers Group, with Citicorp in 1998 to create Citigroup: the all-service bank that required the US government to take a 36 per cent stake in order to survive in 2008. Shortly after moving to Citigroup, Dimon fell out with Weill and was fired. He became CEO of America's fifth largest bank, Bank One, which he streamlined and sold a few years later to J.P. Morgan. He took over as CEO of the latter in mid-2004.

Under Dimon's stewardship, J.P. Morgan reduced its exposure to the mortgage-backed securities and other derivatives that were to be a primary cause of the credit crisis. As fear gripped financial markets, J.P. Morgan purchased Bear Stearns. He then added another regional bank to the firm but declined the opportunity to buy Lehman Brothers. Historians took note that 100 years earlier, the original J.P. Morgan, John Pierpont Morgan, specialised in reorganising troubled businesses, overseeing the bailouts during the financial panic of 1907.

The author's view of Dimon as a hero is perhaps overstated. Like all good CEOs, Dimon looks after the interests of his company. The purchase of Bear Stearns was made because it was great deal for the bank not because it was a great deal for the country. As J.P. Morgan has thrived, Dimon has gained the respect of President Obama. Their relationship is difficult to characterise. One story goes that when President Obama was getting frustrated with a detailed briefing about the financial crisis, he shrugged and said, "I will call Jamie about it" and halted the briefing. Whilst Dimon's reputation remains high amongst financial regulators and the US Treasury because of his purchase of Bear Stearns and his willingness to hear their concerns about other possible acquisitions of distressed banks, he is resisting many of their proposals aimed at better regulating the financial sector. And yet at 54, Dimon is already being mentioned as a potential US Treasury secretary. As the book makes clear, Dimon is a great manager and leader within the financial community. But the man himself is clear that he's more interested in running J.P. Morgan than the US economy.


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