Senate panel chief questions Dimon's Fed seat

By John Poirier

WASHINGTON (Reuters) - The chairman of the U.S. Senate Banking Committee on Wednesday expressed concern that JPMorgan Chase & Co head Jamie Dimon held a Federal Reserve Bank of New York board seat while his bank was in talks with the Federal Reserve over a deal to acquire Bear Stearns.

Sen. Christopher Dodd made his remarks in an interview with National Public Radio.

With support from the Fed and the Treasury Department, Bear Stearns Cos Inc has agreed to be sold to JPMorgan for about $10 a share. As part of the deal, the Fed agreed to guarantee up to $29 billion of Bear Stearns' assets.

"I have great respect for Jamie Dimon, who's head of JPMorgan," Dodd, a Connecticut Democrat, said in the interview with National Public Radio.

"He also sits on the board of directors at the Federal Reserve in New York. Having decisions being made over the weekend with an institution where its leader is also a member of that board raises some serious issues," Dodd said. "It aught to be addressed."

When asked if he suspects Dimon's New York Fed board seat, which expires December 31, 2009, might have been a conflict of interest, Dodd said: "This is what we needed to talk about."

Dimon is the chairman and chief executive of JPMorgan Chase.

Dodd said he is willing to accept the intervention by federal regulators as a one-time event, but would be worried if it becomes a model to tackle future problems.