[Tim Geithner] used the diplomatic language favored by finance ministers, but the message was loud and clear: Mr. Dimon should resign from the board of the New York Fed.Which is a reference to an appearance by Mr. Geithner on a television program where he was invited, three times, to call for Jamie Dimon to resign from the NY Fed's board. Three invitations that Geithner declined, as should be clear to anyone not professing to have a finance minister secret decoder ring;
JEFFREY BROWN: Elizabeth Warren, who helped set up the Consumer Protection Agency for the administration, now running for the Senate in Massachusetts - she said that Jamie Dimon, head of JPMorgan, should not be sitting on the board of the New York Fed, that that just - it isn't right, because they help regulate those banks.]
TIMOTHY GEITHNER: That's not a new observation, not a new concern. It's been made by many people over the last several years.
JEFFREY BROWN: Do you think it's right?
TIMOTHY GEITHNER: I think it is true. And I think it's a problem that that - the structure of the Fed, established 90 years ago, and it's true for Federal Reserve banks across the country, creates that basic perception. And I think that's something worth trying to change. But the American people should understand that although the Fed was set up that way, those banks and the members of the board play no role in supervision. They have no role in the writing of the rules, and they play no role in decisions the Fed makes about how to respond to a financial crisis. Their role is a much more limited role, and the role is to help provide a perspective on what's happening in the economy as a whole. But I agree with you that the, that perception is a problem. And it's worth trying to figure out how to fix that.
JEFFREY BROWN: Do you think Jamie Dimon should be off the board?
TIMOTHY GEITHNER: Well, that's a question he'll have to make and the Fed will have to make. But again, on the basic point, which is it is very important, particularly given the damage caused by the crisis, that our system of oversight and safeguards and the enforcement authorities have not just the resources they need, but they are perceived to be above any political influence and have the independence and the ability to make sure these reforms are tough and effective so we protect the American people, again, from a crisis like this. And we're going to, we're going to do that.So, that is old news. What isn't, is that Mr. Johnson is now taking the opportunity to suggest that Mr. Dimon--among whose sins apparently is that his firm's charitable foundation donates money to MIT's competitor, Columbia University--be replaced on the Fed board with one of Professor Johnson's cronies;
An elegant solution to the current problem would be to replace Mr. Dimon with a distinguished former banker, for example John Reed – previously chief executive of Citigroup and more recently a critic of very large banks. (Mr. Reed and I are both on the new systemic risk council created by Sheila Bair, the former chairman of the Federal Deposit Insurance Corporation. This general idea, but not Mr. Reed’s name, was suggested to me by a leading financial journalist.)Not that there's anything wrong with that.