JPMorgan's Dimon Deserves Clawback: Bair
JPMorganCEO Jamie Dimon should be included in compensation clawbacks following the bank’s massive trading loss, Sheila Bair, former head of the Federal Deposit Insurance Corp., told CNBC’s “Squawk Box” on Wednesday.
“He was part of the decision making, or at least knew about the decision making,” Bair said of the JPMorgan CEO. “Perhaps he wasn’t briefed as well as he should have been.”
Bair added that “if you make a bad bet for the bank and lose money, I don’t think you should get a big bonus.”
While the trading loss was a serious mistake, Bair said it was refreshing that Dimon acknowledged the mistake.
In an interview with CNBC after his congressional testimony on June 13, Dimon was asked about whether he would be giving back any compensation because of the trading loss. "My compensation is completely set by the board of directors," he replied. "I assume they will incorporate this in how they evaluate me. But I'll leave that to them."
JPMorgan is expected to report its second-quarter earnings on Friday.
Bair also weighed in on the London Interbank Offered Rates, or Libor, scandal. Much of the focus has been on the 2008 situation where it appears banks were trying to low-ball rates to make it look healthier than they were. Bair said the more serious scandal may have happened pre-2008 when traders were actively working together to set Libor rates. (Related: What Did Regulators Know?).
“There's always been a fudge factor with Libor," Bair said. “It's judgment, it's not based on market transactions. But I never thought traders would overtly be calling up the submitters and telling them to lower the rate and calling up other banks and telling them the same thing. That's outrageous."