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"Hands up if you know someone who’s a bullshitter.”

Jamie Dimon, chief executive officer of JPMorgan Chase & Co., stood unsmiling before a class of 300 new analysts in a conference room at the Madison Avenue headquarters of the firm’s investment banking division. The analysts stared back in silence, seemingly confused. It was September 13, 2011. Markets were beginning to stabilize after a volatile summer that had seen Europe’s debt crisis spread to Italy and Spain and the U.S. lose its triple-A credit rating. Occupy Wall Street, the messy affair that would take root in lower Manhattan’s Zuccotti Park, was still four days away.

“You know — a bullshitter,” Dimon continued. “Someone who cheats on their tax forms, who gets dinner delivered to the office when they don’t need to be there. We all know one.” First one, then two, then a small forest of arms was raised in agreement. Yes, the analysts — including myself, then a new JPMorgan recruit — all knew a bullshitter. “Right,” Dimon continued. “Now hands up if you’re a bullshitter yourself!” More silence. No hands went up. Dimon, prowling at the front of the auditorium, did not approve. “There are probably a couple of you in here who are bullshitters. If you’re a bullshitter, you should leave now. We don’t want you.”

A year later the swagger that Dimon put on display that morning had all but disappeared. Complex derivatives trades made in early 2012 by JPMorgan’s chief investment office, supposedly to hedge risk, had racked up losses of more than $6 billion. Two of the traders involved have since been charged with wire fraud and conspiracy to falsify books. Despite haranguing his trainee analysts on the evils of deception, Dimon had apparently been blind to such behavior within his own firm.

“The reason the London Whale story was so compelling was that here was an institution that was supposed to be the best-operated bank on Wall Street,” says Phil Angelides, who chaired the U.S.’s Financial Crisis Inquiry Commission from 2009 to 2011. “But it turned out that even the best-managed institution on the Street couldn’t monitor or control its own exposures or even adhere to its own internal risk parameters.” Excessive risk-taking was one of the key accelerators of the cocktail of deregulation, lax underwriting and leverage that led to the financial crisis. But risk remains a persistent feature of the postcrisis world. And as Jamie Dimon can no doubt attest, it is an exceptionally difficult beast to control.