The Wall Street Journal reported yesterday that senior JPMorgan executive, Michael Cavanagh, is leaving for private equity firm Carlyle. As the article explains, people are surprised, because Mr. Cavanagh was thought to be in the running for Mr. Dimon's job. No doubt the offer from Carlyle was enticing, but the Journal reported that there was also something he was running away from at JPMorgan--the prospect of winning the CEO job only to find that it consists primarily of dancing deftly with droves of regulators. So he will leave JPMorgan for the regulatory safe haven of private equity, where he'll be able to concentrate on lending instead of regulatory fights, at least until the regulators turn the brunt of their focus on private equity. Meanwhile, the bankers who stay behind will be too busy mastering the art of compliance to have time for their customers and business plans. As our recent small bank survey shows, this is not a uniquely big bank problem. Executives at small banks are also finding out that a job that used to be about making good loans is now about regulatory compliance.
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Center for Legal Policy at the