NEW YORK Feb 6 Wall Street bankers have
recommended that JPMorgan CEO Jamie Dimon's seat on the board of
the Federal Reserve Bank of New York should be filled by the
head of a Puerto Rican bank.
In a Jan. 18 letter, a committee of New York-area bankers
recommended that Banco Popular de Puerto Rico CEO Richard
Carrion - who is already a director at the New York Fed - shift
into the board seat that Dimon vacated at the end of last year.
If approved, the move could distance the U.S. central bank
from JPMorgan Chase & Co's "London Whale" fiasco - a
$6-billion trading loss that alarmed regulators last year and
sparked criticism that Dimon was a director at the Fed branch
that directly supervised his bank.
If approved in a vote ending March 15, Carrion would
effectively fill the board seat reserved for a representative of
the largest banks in the New York Fed's district.
Historically, that meant an official from a well-known Wall
Street bank like JPMorgan. But because Puerto Rico is part of
the New York Fed's district, and because Banco Popular has grown
enough in the last few years to be classified as a so-called
Group 1 bank, Carrion is now qualified for the role.
If Carrion is approved, his Group 2 seat would then have to
Meanwhile, the boardrooms of regional Fed banks remain under
the microscope on Capitol Hill.
Last month, outspoken Senator Bernie Sanders used Dimon as
an example of conflict of interest when he promised to
reintroduce legislation to ban bankers from directorships.
By law, three of the nine directors of Fed banks must be
bankers, and they cannot participate in regulatory decisions.
Those three, as well as three other directors, are chosen by
bankers in the region, while the remaining three are appointed
by the Fed Board in Washington.