The former head of the Federal Deposit Insurance Corp. called for a breakup of JPMorgan Chase & Co. in a June 11 column published in Fortune magazine.
New York City-based JPMorgan Chase has among the largest branch networks in Westchester and Fairfield counties.
Sheila Bair, who chaired FDIC five years through July 2011, said JPMorgan Chase CEO Jamie Dimon should take the initiative and “shrink Chase to a manageable size” rather than waiting for any government action.
“Whatever economies the megabanks achieve from their size are more than offset by the challenges in managing trillion-dollar institutions that are into trading, market making, investment banking, derivatives, and insurance, in addition to the core business of taking deposits and making loans,” Bair wrote.
“The best way for Dimon to provide a better return to his investors is to recognize that his bank is worth more in smaller, easier-to-manage pieces. Let”™s face it, making a competitive return on equity is going to become even harder for megabanks as their capital requirements go up, their trading and derivatives activities are reined in, and their cost of borrowing rises as bond investors recognize that too-big-too-fail is over,” she said.
