NEW YORK (TheStreet) --Never a bank to miss an opportunity, JPMorgan Chase (JPM) is trying to make lemons into lemonade by using the departure of a key executive to continue its endless lobbying for lighter regulations.
"People close to him" told The Wall Street Journal that "Mr. Cavanagh's decision was partly motivated by the bank's legal and regulatory battles."
And people "who insisted on anonymity because they were not authorized to speak publicly," told The New York Times that "in weighing his choices, Mr. Cavanagh winced at the idea of facing similar scrutiny one day if he became chief executive."
The Times story, presumably driven by its Dealbook persona, also includes this gem:
"Industry analysts worry that the lure of private equity firms and other players could siphon some of the most capable executives away from overseeing banks that are critically important to the economy."
It is followed by a quote from a Moody's analyst warning that "if intellectual capital starts getting drained out of the industry, that is something we will be paying attention to."
Stories by Reuters and Bloomberg, among others, include similar spin.
But guess what, folks? Top executives have been fleeing big banks for private equity firms, hedge funds and M&A boutiques for years-long before the 2008 crisis.
Is regulatory scrutiny a factor in executives' decisions? Probably, but the overwhelming factor has got to be money. That's how top financial services executives measure themselves. They all have more than they need to buy whatever they want. But why should I settle for $10 million when the joker who used to sit next to me just made the Forbes billionaires list?
If banks are losing "intellectual capital" because regulators are forcing them to be more boring, so be it. The reason they are removing the risks from these institutions is that even the intellectuals--sorry, I just find the use of that word too funny--couldn't run them.
So now the talk is that Gordon Smith, a former American Express (AXP) executive, may be groomed as Dimon's successor. He doesn't have an investment banking background, and so hasn't been knee-deep in the dark arts of derivatives trades that lost JPMorgan $6.2 billion during the 2012 London Whale debacle. Fine. But those trades are now supposedly illegal under the Volcker Rule anyway, assuming regulators wrote the rule correctly and actually enforce the rule. And if they don't, well, that's why banks are holding more capital. Because let's remember who was running JPMorgan when it botched those trades: the great intellectual known as Jamie Dimon