NEW YORK (Reuters) - As President Barack Obama casts around for a new U.S. Treasury Secretary, one top bond manager has a suggestion: Forget the London Whale debacle and consider JPMorgan Chase’s (JPM.N) CEO Jamie Dimon.
Timothy Geithner, who has held the top Treasury post and one of the most powerful positions in world finance since 2009, is expected to leave early in the new year. He will stay through Inauguration Day, January 21, the White House said.
Bonnie Baha, portfolio manager for global developed credit at Doubleline Capital LP, praised Dimon, the recently embattled bank chief, for his “ability to communicate ideas.” She said that the startling $6.2 billion trading loss that triggered a Congressional investigation was “barely a blip” for the bank over the long haul.
Baha said at the Reuters Investment 2013 Outlook Summit that she has been impressed by Dimon’s crisis management style during the debacle, which spawned the nickname “London Whale” for the trader held responsible for the aggressive and risky derivatives trades that triggered massive losses.
Once Dimon recognized the gravity of the issue, he acknowledged JPMorgan’s failings and made several key adjustments, she said.
Commenting on the likelihood of Dimon being chosen for the top post at Treasury, Baha said: “Would I like to see him get it? Yes. Will he get it? No.”
Dimon, 56, has been on the board of directors at the New York Federal Reserve Bank for six years and has frequently been included in Time magazine’s annual list of “100 most influential people.”
He is one of the few people in the United States who has the right blend of experience to head Treasury - London Whale notwithstanding, said Baha, adding: “We all have issues that happen on our watch that are regrettable.”
The JPMorgan CEO, whose pay package in 2011 was an estimated $23 million, has long been a harsh critic of tougher rules imposed on the financial services industry after the 2007-2009 recession and global markets meltdown.
But last month, Dimon backed Obama’s goal of raising taxes on top earners to avert the so-called fiscal cliff, and he has been one of the senior corporate chieftains with whom Obama has been in touch to press his economic agenda.
From other names that have routinely surfaced as replacements for Geithner, Baha rejected billionaire investor Warren Buffett as “too old” and Laurence Fink, chairman of the giant BlackRock money management company as “too polarizing.”
Dimon last week named little-known executive Marianne Lake as JPMorgan Chase’s chief financial officer, immediately making her one of the most powerful women on Wall Street and the top ambassador to investors for the largest U.S. bank.
Lake, 43, a CFO for JPM’s retail branch systems since 2009, will replace Doug Braunstein early next year. She will answer directly to Dimon in her new role, reestablishing a reporting line taken away from the CFO post this summer after the huge trading losses damaged the company’s credibility with securities analysts.
(For other news from Reuters Global Investment Outlook Summit, click here)
Reporting By Ros Krasny and Jennifer Ablan; editing by Gunna Dickson