Should Jamie Dimon Resign From the New York Fed?: Poll
NEW YORK (TheStreet) -- Calls for JPMorgan Chase(JPM) CEO Jamie Dimon to step down from the board of directors of the New York Federal Reserve are growing louder following the disclosure of the bank's $2 billion trading loss.
Critics argue that Dimon, who has been the industry's loudest critic of some regulations including the need for additional capital buffers and aspects of the Volcker rule, has an undue influence on the New York Fed.
With the bank under scrutiny for the recent losses, Washington officials, notably Massachusetts Senate Candidate Elizabeth Warren, have been demanding his resignation from the board to allow for a proper investigation into the issue.
"We need to stop the cycle of bankers taking on risky activities, getting bailed out by the taxpayers, then using their army of lobbyists to water down regulations," Warren said in a statement following the disclosure. "We need a tough cop on the beat so that no one steals your purse on Main Street or your pension on Wall Street."
She added that Dimon's resignation will "send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability."
While Dimon has defended his position, arguing that he serves primarily in an advisory capacity, critics argue that there is an obvious conflict of interest in his continuing to be on the board, even as his bank is under investigation for the losses.
Dimon will testify before the Senate Banking Committee on June 7 about the massive trading loss.
Regulatory pressures are climbing for the bank. On Tuesday, press reports that the bank may face scrutiny from Japan's Financial Services Authority in a probe on insider trading added further concerns about the bank's internal risk controls.
Meanwhile, a clutch of analyst downgrades hit bank stocks amid worsening macro-economic conditions and a harsher regulatory climate. JPMorgan's "CIO" loss extinguishes investor complacency regarding new regulation, Moody's downgrades," Bank of America Merrill Lynch's Guy Moszkowski wrote in a report.
Last Thursday, former IMF economist Simon Johnson launched a petition on Change.org calling for Dimon's resignation from the board in the wake of the trading losses.