In Jimmy Lee, the banking industry has lost an influential force who helped shape its dominant (and most controversial) business model of the late 20th and early 21st centuries the megabank.
Lee, who unexpectedly passed away Wednesday at age 62, pioneered syndicated loan lending at Chemical Bank in the 1970s and at its successor companies Chase Manhattan and JPMorgan Chase.
This form of leveraged finance helped banks support bigger buyouts and mergers, paving the way for banks to expand into new business lines. It helped transform them into diversified financial conglomerates and undo the separation of commercial and investment banking that had reigned since the Great Depression.
"A lot of what he did helped to bring the universal-bank model more to the forefront," said Jeff Harte, an analyst with Sandler O'Neill.
Lee, who was JPMorgan's vice chairman, early on argued for the importance of banks to become the go-to place for all customers' various financial needs.
"The fact that Street firms have gone aggressively into the lending business underscores the power of one-stop shopping," Lee told American Banker in a December 1996 interview. "What distinguishes us is the scale in which we are doing it and the experience we bring to the table."
Some have soured on universal banking in the wake of the financial crisis, but the biggest banks continue to loom large in the industry, said Tom Michaud, vice chairman at Keefe, Bruyette & Woods.
Lee "is one of the architects who helped build the universal banking model and one of the great legacies of his career is that model, I believe, will endure," Michaud said.
To see the power of the universal-banking model, look to competitors overseas, Harte said. Chinese banks have begun to adopt the approach that Lee championed.
"The popularity of universal banking ebbs and flows cyclically, and we're still at a point where it's more negative than positive," Harte said. "But where the longer term, secular trend is if you want to compete internationally, you've got to be big."
When JPMorgan and its boss Jamie Dimon became a flashpoint in the debate over whether megabanks are too big to manage, Lee rallied support for him.
Dimon was struggling with the multibillion-dollar London Whale trading loss and the criticism it drew, so "legendary sports fan" Lee set up a call between Dimon and New England Patriots quarterback Tom Brady in 2012.
The meeting was reported in a Vanity Fair article, and covered widely, including in American Banker, which summed up the encounter this way: "When regulators, lawmakers, investors and journalists are dissecting your big financial mishap a pep talk from someone who evades 300-pound linemen for a living would go a long way."
Besides his loyalty to JPMorgan, Lee was legendary for his networking skill.
Lee "told me that his network was a living breathing thing and that it had to be nurtured," said Alexandra Lebenthal, chief executive of trust company Lebenthal Holdings. Lee had a list of people he called every day, just to "make sure they knew he was thinking of them," she said.
When Lee advised Daniel Loeb, founder and chief executive of the hedge fund Third Point LLC, on buying stock with Sony, he told Loeb to fly across the world for his new investment literally.
"When I told Jimmy I planned to send a Japanese CEO a letter announcing we were becoming active in its stock, he advised me to deliver it in person, which I did," Loeb said in a public statement on Lee's passing. "That act earned us praise in Japan for showing special sensitivity to the country's cultural customs."
Lebenthal recalled how Lee made her feel like she was "Cinderella let into the ball" when he invited her to a JPMorgan conference with Dimon and then-New York City Mayor Mike Bloomberg. Lee extended that treatment to front-line employees.
"If a client treated a person at the front desk badly, he didn't want to do business with that person," Lebenthal said.
At one time, Lee was rumored to be considering a job offer from the private-equity firm Blackstone Group. Lee likely decided to stay at JPMorgan because the company appreciated his talents, Harte said.
"In business you find a lot that your ability to get along with people is very important he was really good with people," Harte said. "Jimmy Lee was one of the good guys."