Wednesday, June 13 2012, 01:02 PM MDT
Bank CEO Questioned About Risky Trades
(KUTV) The head of the country's largest bank is on Capitol Hill answering questions about how risky trades cost the company more than two billion dollars.
JP Morgan Chase CEO Jamie Dimon is characterizing it as an isolated incident - while some lawmakers want to know if stricter banking regulation is needed.
Dimon was welcomed to Capitol Hill by protestors.
The Senate Banking Committee invited him to explain how the largest U.S. bank lost more than 2 billion dollars on risky trades.
Dimon apologized, but said he wants Congress to put it in perspective.
"We will lose some of our shareholders' money - and for that, we feel terrible,” said Dimon. “But no client, customer or taxpayer money was impacted by this incident."
Dimon told lawmakers that Chase will be profitable this year and next year.
"While we can never say we won't make mistake, in fact, we know we will - we do believe this to be an isolated event,” he said.
Senators want to know what Dimon knew back in April when he dismissed concerns about the risky trades. Four weeks later he announced Chase's massive loss.
"I believe that there are two key questions that need to be answered. First, did the losses from these trades threaten the safety and soundness of JPMorgan? And second, could it happen again?” asked Sen. Richard Shelby.
Lawmakers are also trying to get a handle on whether big banks are still a big risk to the country's financial system - and whether tighter regulations would have prevented this loss.
"What's to stop this from happening again, maybe being a larger loss of the same type, but particularly at a smaller less capitalized institution,” said Senator Chuck Schumer.
Since the financial crisis - Dimon has spoken out against stricter banking regulations.
Dimon told lawmakers today that Chase will likely take back some of the pay of senior bank executives responsible for the massive trading loss
(Copyright 2012 Sinclair Broadcasting Group.)