$6B Loss and Counting; Why is Jamie Dimon on a Federal Reserve board?

by 21 May 2012

NEW YORK (CNNMoney) -- Is there a conflict of interest when bankers like JPMorgan Chase CEO Jamie Dimon serve on the board of the same institution that regulates them?

Insiders say no. But critics harp on the central bank for what seems like an incestuous relationship with Wall Street.

Massachusetts Senate candidate Elizabeth Warren called for Dimon's resignation from the New York Fed's board last week, and Sen. Bernie Sanders has used the uproar to promote the idea of overhauling the Federal Reserve.

"The conflicts of interest are so apparent that they're laughable," Sanders told CNN's Wolf Blitzer last week. "Here you have the Fed, which is supposed to regulate Wall Street. Then you have the CEO of the largest Wall Street company on the board which [it] is supposed to be regulating. This is the fox guarding the henhouse."

Dimon served on the New York Fed's board of directors amid the financial crisis. Appointed to the post initially in 2007, he is scheduled to end his second three-year term in December. He is currently the only executive of a major national bank to serve on a regional board.

If it seems shady though, don't blame the Fed. Congress intentionally set the central bank up that way in 1913.

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