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The drama continues to build surrounding JPMorgan Chase's annual shareholders meeting, scheduled for May 21.

The meeting has the feel of a heavyweight prize fight. The stakes on the surface appear to be high, as the JPMorgan board has not been shy about the likelihood of CEO Jamie Dimon resigning if shareholders vote to split the chairman and CEO positions. Dimon currently holds both titles, in addition to the title of president.

The Financial Times has weighed in with a piece that handicaps the vote, suggesting that the timing seems favorable for shareholder advocates.

It notes that, "In early May last year the bank disclosed $6bn in trading losses from a trader nicknamed the "London whale" for his outsized credit derivatives positions. A few days later 40 per cent of the vote on the motion of splitting the jobs went against the company. But a large proportion of shareholders had cast early ballots before JPMorgan's disclosure of the whale problem. This means many shareholders have never delivered a verdict on the fiasco, which worsened in the year with investigations by the Securities and Exchange Commission, Federal Bureau of Investigation and damning criticism from Congress."

The executive merry-go-around at the bank has also been in the news recently, which serves to publicize the upcoming vote. On top of that, the proxy advisory firms have thrown their weight (again) behind the proposal. Given that the proposal won 40 percent of the vote last year, it seems that 50 percent is within reach this year.

The bank's board continues to reach out to shareholders, but so far the results have been indeterminate.

"But the bank has failed to buy off shareholders as convincingly as Goldman did earlier this month, when it persuaded agitators to wipe from the agenda a vote on Lloyd Blankfein's dual role," the FT notes.

Goldman Sachs was able to get shareholders to back down. But an executive at CtW Investment Group, told the FT that, "We were particularly struck by the contrast to JPMorgan."

Perhaps the shareholder advocates have the upper hand right now.

For more:
- here's the article

Read more about: JPMorgan Chase, Annual Meeting
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2. Basel III vs. Brown-Vitter

By Jim Kim

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3. Mid-East bank is world's strongest

Part of the appeal of the Brown-Vitter capital requirements proposal is its sheer simplicity, as reflected by the bill's brevity. It was proposed at just 24 pages, compared with roughly 2,300 pages for early versions of Dodd-Frank and 66 pages for Sarbanes-Oxley.

Some have called the bill the antithesis of Dodd-Frank, which the authors take as a compliment. But the real antithesis may be Basel III, which is known for its complexity.

Under Brown-Vitter, the largest banks would have to hold a whopping 15 percent of assets as equity, which compares with 7 percent under Basel III, including a 2.5 percent capital conservation buffer. What's more, the Brown-Vitter bill does away with some of the ornate definitions and risk weighing built into Basel III.

Indeed, as Bloomberg Businessweek points out, the bill basically requires that U.S. agencies be prohibited from "further implementation of any rules" that come out of Basel. One of the authors was quoted saying, "We think Basel II and Basel III are hopelessly complicated. And risk weighting, it's too easy to be gamed, certainly the versions I've seen."

This will likely strain already delicate U.S. relationships with other regulators, especially in Europe, which is also struggling to form new regulatory paradigms for the post-crisis industry. We're seeing lots of spats break out, over such things as subsidiarization, ring-fencing and swap rules. At this point, it's tempting to interpret this regulatory fragmentation as a sign that regulators are having trouble keeping up with the pace of globalization.

For more:
- here's the article

Related Article:
Legislation may push big banks to break up

Read more about: regulation, Basel III
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By Jim Kim

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4. Bob Diamond aims to rehabilitate his image

If you were asked to name the world's strongest bank, you wouldn't likely pick a U.S. bank right now. Nor would you pick a European bank. You might pick one of the Canadian or Asian banks, which continue to appear quite strong.

But according to the most recent ranking from Bloomberg Markets, the world's strongest bank in fiscal year 2012 was Qatar National Bank, which bulldozed into the top spot by dint of acquisitions and a flight to safety in turbulent political times.

The magazine's strongest-bank ranking includes banks with at least $100 billion in assets. It relies on five criteria, including Tier 1 capital compared with risk-weighted assets; nonperforming assets against total assets; and efficiency, a measure of costs against revenues.

The top tier is dominated for the third straight year by Asian and Canadian lenders. Singapore's Oversea-Chinese Banking Corp., which was first in the past two years, dropped to second place in 2012. Some of Canada's banks also fell, as the industry was hit by ratings downgrades and hurt by a slowing economy and an increasingly risky housing sector.

So what about U.S. banks?

In a surprising development, Citigroup was deemed the strongest U.S. bank. It ranked ninth in the world. Coming in second among U.S. banks was JPMorgan Chase, which ranked 15th in the world. Those were the only two U.S. banks that made the top 20.

For more:
- here's the list
- here's the article

Read more about: balance sheet, JPMorgan Chase
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By Jim Kim

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5. SAC enhances compliance program

How the mighty have fallen.

Bob Diamond, the one-time CEO of Barclays, has been relegated to riding the New York City subway to work in a far-off office. The New York Times Magazine has the pictures to prove it. The article notes that he also waits in line for coffee at street-side cart on Park Avenue, which isn't exactly skid row. Still, he's accustomed to so much more.

"Not to suggest that times are too tough for Diamond — he's not complaining, and he still has more money than his grandchildren's grandchildren will ever need. But for the American investment banker who was arguably responsible more than anyone else for transforming the British finance industry, it has been a pretty spectacular fall," the magazine noted.

It could've been a lot worse. Diamond has not been charged for playing any sort of role in the Libor scandal that engulfed the bank -- not even with negligence or failure to supervise. But he has become the face of the scandal in many ways, and that will taint him for many years to come.

There comes a point when every tainted executive tries to make a comeback, and it often starts with sympathetic press coverage.

"This is going to sound arrogant as hell," he told the Times, "but I never did anything for money. I never set money as a goal. It was a result. And if you look at how Jennifer and I and our three kids have lived our lives, as soon as we had any money at all, we created a family foundation. The only car I own, honestly, is an 11-year-old Jeep on Nantucket. I think Jennifer and I have always had a great home for our kids. We really like to take vacations with them, so those are good. But we don't have a boat, we don't have fancy cars. I think we have lived well, but it hasn't been about accumulation or anything like that."

That said, the article notes he owns houses in Nantucket and in Beaver Creek, Colo. He lives in a $37 million penthouse apartment on the 40th floor of 15 Central Park West.

Diamond bought it "under the name of Novgorod, a Russian-sounding company he created to make it appear that an oligarch had bought the apartment."

Sometimes, comeback attempts work. Other times, it falls flat. Dick Fuld, former CEO of Lehman Brothers falls in the latter category. It remains to be seen where Diamond will fall.

For more:
- here's the profile

Related Article:
Can former top execs start fresh on Wall Street?

Read more about: Barclays, Bob Diamond
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By Jim Kim

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