Bill Moyers: If Chase began to collapse because of risky betting, would the government be forced to step in again?
Simon Johnson: Absolutely, Bill. JPMorgan Chase is too big to fail. Hopefully in the future we can move away from this system, but right now it is too big.
It's about a $2.5 trillion dollar bank in terms of total assets. That's roughly 20 percent of the U.S. economy, comparing their assets to our GDP. 
That's huge. If that bank were to collapse -- I'm not saying it will -- but if it were to collapse, it would be a shock to the economy bigger than that of the collapse of Lehman Brothers, and as a result, they would be protected by the Federal Reserve. They are exactly what's known as too big to fail.
Moyers: I was just looking at an interview I did with you in February of 2009, soon after the collapse of 2008 and you said, and I'm quoting, "The signs that I see... the body language, the words, the op-eds, the testimony, the way these bankers are treated by certain congressional committees, it makes me feel very worried. I have a feeling in my stomach that is what I had in other countries, much poorer countries, countries that were headed into really difficult economic situations.
When there's a small group of people who got you into a disaster and who are still powerful, you know you need to come in and break that power and you can't. You're stuck." 
How do you feel about that insight now?
Johnson: I'm still nervous, and I think that the losses that JPMorgan reported -- that CEO Jamie Dimon reported -- and the way in which they're presented, the fact that they're surprised by it and the fact that they didn't know they were taking these kinds of risks, the fact that they lost so much money in a relatively benign moment compared to what we've seen in the past and what we're likely to see in the future -- all of this suggests that we are absolutely on the path towards another financial crisis of the same order of magnitude as the last one.
Moyers: Should Jamie Dimon resign? I ask that because as you know and as we've discussed, Chase and other huge banks have been using their enormous wealth for years to, in effect, buy off our politicians and regulators.
Chase just had to pay up almost three quarters of a billion dollars in settlements and surrendered fees to settle one case alone, that of bribery and corruption in Jefferson County, Alabama. (One of Taibbi's best pieces
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It's also paid out billions of dollars to settle other cases of perjury, forgery, fraud and sale of unregistered securities. 
And these charges were for actions that took place while Mr. Dimon was the CEO. Should he resign?
Johnson: I think, Bill, there should be an independent investigation into how JPMorgan operates both with regard to these losses and with regard to all of the problems that you just identified. This investigation should be conducted separate from the board of directors. Remember that the shareholders and the board of directors absolutely have an incentive to keep JPMorgan Chase as a too-big-to-fail bank. But because it is that kind of bank, its downside risk is taken by the Federal Reserve, by the taxpayer, by the broader economy and all citizens. We need to have an independent, detailed, specific investigation to establish who knew what when and what kind of wrongdoing management was engaged in. On the basis of that, we'll see what we'll see and who should have to resign.
Moyers:
Dimon is also on the board of the Federal Reserve Bank of New York, which, as everyone knows is supposed to regulate JPMorgan. 
What in the world are bankers doing on the Fed board, regulating themselves?
Johnson: This is a terrible situation, Bill. It goes back to the origins, the political compromise at the very beginning of the Federal Reserve system about a hundred years ago. The bankers were very powerful back then, also, and they got a Federal Reserve system in which they had a lot of representation. Some of that has eroded over time because of previous abuses, but you're absolutely right, the prominent bankers, including most notably, Jamie Dimon, are members of the board of the New York Federal Reserve, a key element in the Federal Reserve system. And he should, under these circumstances, absolutely step down from that role. It's completely inappropriate to have such a big bank represented in this fashion. The New York Fed claims there's no impropriety, there's no wrong doing and he doesn't involve himself in supervision and so on and so forth. Perhaps, but
why does Mr. Dimon, a very busy man, take time out of his day to be on the board of the New York fed? He is getting something from this. It's a trade, just like everything else on Wall Street. 
Moyers: He dismissed criticism of his dual role yesterday by downplaying the role of the Fed board. He said it's more like an "advisory group than anything else." I had to check my hearing aid to see if I'd heard that correctly.
Johnson: Well, I think he is advising them on lots of things. He also, of course, meets with some regularity with top Treasury officials, and some reports say that he meets with President Obama with some regularity.
The political access and connections of Mr. Dimon are second to none. One of his senior executives was until recently chief of staff in the White House, if you can believe that.
I really think this has gone far enough. Under these kinds of circumstances with this amount of loss of control over risk management, what we need to have is Mr. Dimon step down from the New York Federal Reserve Board.
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