Dimon Doesn't Buy 'Too Clubby to Fail'

JPMorgan's Jamie Dimon said he was 'unaware of any club' that favored large banks during the financial crisis.
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NEW YORK (

TheStreet

) --

JPMorgan Chase

(JPM) - Get Report

Chairman and CEO Jamie Dimon said Wednesday he was "unaware of any club" that favored large banks during the financial crisis.

The quote came on the conference call following the company's report of blowout

first-quarter earnings

as Dimon was being cross-examined by a sell-side analyst for his thoughts about whether

Washington Mutual

(WAMUQ.PK)

would have failed regardless of when and how it was put out of business.

"Look you got to ask the regulators, we had nothing to do with the decisions that were made around declaring them insolvent and stuff like that," Dimon said with regard to WaMu. "Obviously they were having deposit outflow. As you remember when we bought the company we put up $40 billion reserves for writedowns and various assets."

The "club" comment was a reference to

statements from Kerry Killinger, WaMu's former CEO

, on Tuesday. WaMu was back in the news this week after a Senate subcommittee released a voluminous report on the company's downfall and eventual acquisition by JPMorgan.

The subcommittee also spoke to a number of former company executives, about why the company failed, including Killinger, on Capitol Hill Tuesday. Killinger maintained in his testimony that WaMu could have survived if it had received capital infusions and other forms of help from the government as other institutions did. Killinger also said he believed the government treated WaMu unfairly by excluding the bank from a list of large financial firms whose stock couldn't be sold short under a temporary government ban in July 2008, according to

The Associated Press

.

"For those that were part of the inner circle and were 'too clubby to fail,' the benefits were obvious," Killinger said, according to the

AP

. "For those outside of the club, the penalty was severe."

WaMu, which was sold to JPMorgan in September 2008 after being seized by the Federal Deposit Insurance Corp., was the largest bank failure in U.S. history. JPMorgan is still feeling aftershocks from WaMu's implosion. The company's latest quarter includes another $1.2 billion provision for credit losses related to WaMu's loan portfolio.

JPMorgan shares were rallying in midday action, gaining 3.1% to $47.28 in recent trades. The session-high of $47.41 was just six cents shy of the stock's 52-week high of $47.47, which it set back in October 2009. The rest of the big banks, who will follow with their results over the next two weeks, were seeing plenty of buying interest as well.

--Written by Laurie Kulikowski in New York.