JPMorgan Chase CEO Jamie Dimon owned up to stock analysts and went on TV to accept blame for a $2 billion trading mistake. Next he faces shareholders, who are considerably less wealthy since the blunder was disclosed.
While Dimon may be greeted by colorful protesters and tough questions at the JPMorgan annual meeting in Tampa, Fla., on Tuesday, shareholders are unlikely to call for his head.
For them, facing the crisis without Dimon might be a bigger nightmare than the trading loss itself.
"When a bank is dealing with this sort of a challenge, you want someone of his caliber to shepherd it through," said longtime JPMorgan shareholder Michael Holland, chairman and founder of money manager Holland & Co.
That has not been a universal opinion since Thursday, when Dimon disclosed to analysts that the bank had lost $2 billion by making a bad bet with so-called credit derivatives.
Investors lopped almost 10 percent off JPMorgan's stock price the next day, and 3 percent more on Monday. Since Dimon made the announcement, almost $20 billion in market value has evaporated.
Over the weekend, Elizabeth Warren, architect of the Consumer Financial Protection Bureau and a Senate candidate from Massachusetts, called for Dimon to give up his board seat at the Federal Reserve Bank of New York.
And on Monday, White House press secretary Jay Carney, without singling out Dimon, said that Washington can't prevent "bad decisions being made on Wall Street."
He pointed out that it was the bank and its shareholders, not bailout-weary taxpayers, who were suffering this time.
Dimon will be talking to shareholders from a position of weakness for the first time. He has built a reputation as a cost-cutting zealot and an expert at keeping risk under control.
He led JPMorgan into a stronger position than almost any other bank after the 2008 financial crisis, which brought him more praise than at any other time in his career.
Shareholders rarely lash out against Dimon. Vikram Pandit of Citigroup and Brian Moynihan of Bank of America are not so fortunate: Shareholders at those banks take the slightest opportunity to call for them to step down.
Dimon's reputation has been severely damaged now. But shareholders still appear to believe he should be given the chance to prove himself again.
"He's earned enough market respect to have the opportunity to correct this," said Benjamin Wallace of investment firm Grimes & Co., a longtime shareholder that sold its JPMorgan shares six months ago.
"I don't think anyone else can do a better job than him, and we would not be calling for his ouster," Wallace said.
Dimon said on Sunday that the bank had "made a terrible, egregious mistake" and that there was "almost no excuse for it."
Yet there have been no signs of a shareholder insurrection against Dimon, and no member of the board of directors has spoken out against him since he disclosed the loss.
He still holds a reputation as the man who restored Bank One to a profit a decade ago when few thought it was possible and who kept JPMorgan Chase profitable through the financial crisis by managing its risk.
And while $2 billion was a stunning figure, as the investor reaction demonstrates, JPMorgan is more than big enough to absorb the loss. The bank made $19 billion last year alone.
"Banking is a people business, and people are going to make mistakes," said Steve Shafer, chief investment officer of the hedge fund Covenant Global Investors in Oklahoma City, which bought JPMorgan shares on Friday.
"If anything, this just reveals how difficult it is, with some of the smartest hedgers on the face of the earth, to interpret what the markets are going to do," he added.
Dimon has said the bank lost the money in a strategy to hedge against financial risk, as banks often do, not because it was trading for its own profit. Some lawmakers have cast doubt on that portrayal.
JPMorgan's disclosure has led lawmakers and critics of the banking industry to call for stricter regulation of Wall Street.
On Monday, President Barack Obama said JPMorgan's loss in high-risk trading shows the need for the Wall Street rules that Congress passed two years ago.
JPMorgan "is of the best managed banks," Obama said during an appearance on ABC's "The View," a daytime talk show. "You could have a bank that isn't as strong, isn't as profitable, making those same bets and we might have had to step in. Which his exactly why Wall Street reform is so important."
Many post-crisis rules governing risk-taking by banks are still being written.
Among them is the so-called Volcker rule, which would block banks from trading for their own profit, a practice known as proprietary trading. Dimon has said the trading in question would not violate the rule.
On Monday, Sen. Tim Johnson, D-S.D., chairman of the Senate Banking Committee, announced additional hearings on financial regulation and said he expected the JPMorgan loss to be discussed.
Four days after Dimon announced the trading blunder, the executive responsible for trading strategy at JPMorgan, one of the highest-ranking women on Wall Street, became the first casualty.
The bank said that Ina Drew, 55, the chief investment officer for the bank and a 30-year veteran of the company, would retire and be replaced by Matt Zames, an executive in JPMorgan's investment bank.
Dimon said Drew's "vast contributions to our company should not be overshadowed by these events." He stressed that the company remains "very strong."
"We maintain our fortress balance sheet and capital strength to withstand setbacks like this, and we will learn from our mistakes and remain diligently focused on our clients, who count on us every day," Dimon said.
JPMorgan is holding the meeting in Tampa partly because the bank is expanding in Florida. Dimon will address shareholders, who will get to ask questions.
They will also vote their approval or disapproval of his $23 million pay package from last year. The vote is non-binding, and Dimon is unlikely to lose it. The overwhelming majority of votes were probably locked in before the meeting.
Not all shareholders are squarely behind him. An influential union, the American Federation of State County and Municipal Employees, wants Dimon to be stripped of his chairman's title, which he holds in addition to being CEO.
"The stakes are too high to leave Jamie Dimon unsupervised," said Gerald W. McEntee, trustee for AFSCME, which owns JPMorgan shares through its pension plan.
James Rickards, author of "Currency Wars: The Making of the Next Global Crisis" and a partner in JAC Capital Advisors, a New York hedge fund, has called for him to resign as CEO.
JPMorgan has access to funding from the Federal Reserve at an interest rate of almost zero and lends it out to people and businesses at a higher rate, he pointed out.
"The money that his bank put at risk comes at the cost of everyday Americans who are getting zero income on their savings accounts, and Dimon should take the ultimate responsibility," Rickards said.
Bank annual meetings have been intriguing affairs since the 2008 financial crisis, almost always attended by placard-wielding protesters.
And consumer advocates usually show up to air grievances against the bank's handling of its activities including foreclosures, credit card debt, and overdraft fees.
But an anti-Dimon revolt is unlikely Tuesday in Tampa.
"Yes, it happened on his watch, and he is eating humble pie," Holland said. "But I have seen lots of bank CEOs come and go, and even after a $2 billion fiasco, Dimon is one of the best."