Note: Congressional hearings on JPMorgan begin Wednesday at 10 a.m. in Dirkson Senate Office Building, room 538.
Over the next 13 days, Congress will examine JPMorgan’s extraordinary multibillion-dollar trading loss from its London office. The bank’s regulators, along with CEO Jamie Dimon, are slated to testify over the course of two Senate hearings and one House hearing.
Vital policy issues will be shaped with information about this loss, which cost JPMorgan shareholders more than $25 billion in market value.
At the June 6 hearing before the Senate banking committee with JPMorgan’s regulators, senators should explore regulatory failures and how compensation figured in the trades.
JPMorgan said that its regulators were “comfortable” with its London position. Senators should explore why regulators may have viewed this as an acceptable loss in the ordinary course of business. If regulators were not aware of the potential loss at the time, senators should explore why they may not be capable of detecting such a complex position that could lead to the failure of the bank. What the bank now calls a “badly conceived” trade was previously termed a “tempest in a teapot” by Dimon, arguing that the nation’s largest bank and best respected manager failed to understand it.
