On September 27th, the financial press reported that William “Bill” Winters, a chief executive of JP Morgan Chase’s investment banking division, had placed much of the blame for the worldwide economic crisis on “greedy bankers.” See “Financial News: Winters Hits Out At Greedy Bankers,” posted by Harry Wilson on www.efinancialnews.com. Two days later, Jamie Dimon, chairman and chief executive of JP Morgan Chase, announced that Mr. Winters is leaving the company and will be replaced by Jes Staley, as reported by the New York Times Deal Book article, “JP Morgan Shuffles Investment Bank Management,” dated September 29, 2009.
Mr. Winters, age 48, is one of the most respected bankers in London. According to his replacement, Mr. Staley, Winters “helped build the leading investment bank in the world today’.” Mr. Winters’ remarks had been made a week ago as part of a debate in London hosted by the Investment Management Association, the largest trading body for fund managers. He was arguing the case against the debate’s motion: “This house believes that the future regulation of financial services requires the separation of retail and wholesale banking activities.” In this rather intellectual setting, Mr. Winters argued that people should not “throw out the baby with the bathwater,” and observed that the recent financial collapse had been caused by “greedy bankers, investors and borrowers” and “inept risk managers who replied on the ratings agencies.”
The London professionals in the audience were not aghast at his remarks. In fact, they changed their initial position and voted with Winters, according to the efinancialnews article. Winters critical comments about “greedy bankers” are not out of line with Goldman Sachs’ chief executive, Lloyd Blanfein, who earlier this month indicated that bankers’ compensation had encouraged “excessive risk taking.” Still, the timing and abruptness of Dimon’s announcement of the departure of the well-respected and relatively young Winters suggests that some greedy bankers were deeply offended.