JPMorgan CFO to Step Down, Dimon Rants, Authorities Build Case Against London Whale

Receiving Wide Coverage ...

The JPMorgan Shuffle Continues: JPMorgan cannot stop revamping its organization chart. One month after an overhaul of its corporate and investment banking division and a week after two upper-level departures, multiple news outlets are reporting the bank's chief financial officer Douglas Braunstein will step down by the end of the year. The move isn't all that surprising given Braunstein found his role significantly diminished during another major executive shake-up back in September due largely to the botched London Whale trades. Both Braunstein and JPMorgan have yet to comment on the news, broken initially by the Journal and credited to "people close to the company." Braunstein is not expected to leave JPMorgan completely, but, instead, will take on a different job at the bank. Sources say this new role could be at the firm's corporate and investment division. New York Times, Financial Times

Dimon's Two Cents: Meanwhile, the one apparent constant in JPMorgan's hierarchy, CEO Jamie Dimon ranted both figuratively and literally on Washington yesterday with various new outlets gleaning on to different choice quotes from a speech he gave at the Council on Foreign Relations. Among the very many things Dimon remains mad or concerned about are the fiscal cliff ("I just think it's terrible policy to let us get close,"), overregulation ("When people make mistakes, they're attacked by 17 different agencies as opposed to the old days it would be just the one that's responsible,") and the deal he brokered with the Federal Reserve for Bear Stearns ("Would I have done Bear Stearns again, knowing what I know today? It's real close.") You'll notice JPMorgan itself conspicuously missing from the diatribe. CNN, Washington Post, Wall Street Journal, American Banker

Cap 'Em: Federal Reserve Governor Daniel Tarullo has some ideas on how to stop banks from becoming too big to fail. In a speech at the University of Pennsylvania Law School yesterday, Tarullo suggested capping the size of U.S. financial firms by restricting the amount of non-deposit liabilities they can hold to a fixed percentage of the economy. He also said the Fed should block any merger or acquisition the nation's biggest banks try to make. "There would be merit in its adopting a simpler policy instrument, rather than relying on indirect, incomplete policy measures such as administrative calculation of potentially complex financial stability footprints," Tarullo said, joining a list of several industry members (which, yes, includes Sandy Weill) who have advocated various size limits be imposed on big banks (which, yes, includes breaking them up.) But while legislation to this effect is discussed in Congress, it remains unclear whether lawmakers will adopt such measures. Wall Street Journal, Financial Times, New York Times

Wall Street Journal

Regulators will be keeping a close eye on how much of a boost banks' third-quarter profits receive due to reserve releases, which can "give an inaccurate picture of a bank's health" and "leave banks with thinner cushions and less flexibility to deal with an economic downturn."

Financial Times

Goldman Sachs employees are bracing themselves for another round of media scrutiny courtesy of former derivatives banker Greg Smith, who resigned via a scathing op-ed in the Times back in March and whose new book about the company, "Why I Left Goldman Sachs: A Wall Street Story," is set to debut at the end of the month. "It feels like a drive-by shooting for people here," one unnamed banker told the paper. "People feel really betrayed."

New York Times

Here's some more JPMorgan news: federal authorities are "using taped phone conversations to build criminal cases" related to the bank's multibillion-dollar London Whale trading losses. Interestingly, this investigation focuses on four people: the London Whale himself Bruno Iksil, his captain, Javier Martin-Artajo, Achilles Macris, the executive in charge of the international chief investment office and low-level trader Julien Grout. As such, Dealbook says the findings could actually "insulate JPMorgan and its chief executive, Jamie Dimon, from further fallout."