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Macaskill on markets: Woke banking brings its own risks

US banking chiefs were reminded that their slow move towards socially aware finance brings new risks as they testified to Congress in May.

Warren vs Dimon

An attack on JPMorgan chief executive Jamie Dimon by senator Elizabeth Warren drew most of the headlines after a Congressional hearing on May 26.

Warren accused Dimon of being “the star of the overdraft show” for allowing JPMorgan to charge $1.46 billion of fees during the 2020 pandemic and asked whether or not he would return these charges and settle for $27.6 billion of profit for last year.

“No,” replied Dimon, who was performing his usual role of acting as a human shield for the other five heads of the biggest US banking groups.

The episode where Warren and Dimon talked over each other provided the only real drama in the three-hour hearing, but the bank heads were reminded that they will remain in the political spotlight despite a consensus that they acquitted themselves well during the pandemic.

Senate banking committee chair Sherrod Brown opened the hearing by telling the bankers that “you are the six most powerful businesspeople in America” and closed proceedings by saying “you are the most powerful economic actors in this country.”

That is a bit of a stretch. Amazon head Jeff Bezos or Apple chief Tim Cook might disagree.