"Dear President Bollinger,
"As faculty, employees, 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 Dimon’s tenure you have abdicated this most basic responsibility. You denied your own responsibility to ensure the integrity of the Fed by echoing Mr. Ben Bernanke’s remarks that it is up to Congress to address this problem. You then added that Congress had more pressing issues than this one. In so doing, are you not, in essence, urging inaction by all parties capable of affecting this important change? Further, 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 original injury of encouraging this critical 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 Too Fail institutions – institutions the Federal Reserve bailed out with trillions in taxpayer money.
"We urge you to reverse your support for Mr. Dimon and instead call for his resignation. We respectfully remind you that there is precedent for this kind of action. In April 2011, Jeffrey R. Immelt, chief executive 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 an educator, you have a particular 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 must know of the unemployment crisis currently facing young people in America – a situation brought about in no small measure by the ‘Too Big to Fail’ financial institutions at the heart of the 2008 collapse. That collapse not only threatened the employment potential of millions of American students, but also risked the financial 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 pre-requisite of our recovery. As the Chairman of the NY Fed, you can certainly take this most obvious step forward...."
James and the Twenty-Seven Bicycles
10 years ago