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JPMorgan Chief Expected to Play Down Trade Risks at Hearing
Source: New York Times
JUNE 12, 2012, 8:59 PM
JPMorgan Chief Expected to Play Down Trade Risks at Hearing
BY BEN PROTESS AND JESSICA SILVER-GREENBERG
When JPMorgan’s chief executive, Jamie Dimon, appears Wednesday on Capitol Hill, he plans to play down the risky trading activities that have already prompted at least $3 billion in losses.
In prepared testimony for a Senate hearing into the trading mess, Mr. Dimon called the losses an “isolated event” that would not hurt customers or taxpayers. While apologizing for various mistakes, he explained that risk was unavoidable in the banking business, and ultimately the firm’s capital position and diversified model “did what they were supposed to do” and protected the company against unexpected losses in one area.
Those internal systems will be scrutinized by lawmakers. At the hearing on Wednesday, the Senate Banking Committee will focus on the firm’s risk controls and management oversight. In particular, the committee, led by Tim Johnson, Democrat of South Dakota, will take aim at statements by Mr. Dimon, who publicly dismissed concerns about the risky trades just a month before disclosing the multibillion-dollar losses.
“How can a bank take on ‘far too much risk’ if the point of the trades was to reduce risk in the first place? Or was the goal really to make money?” Mr. Johnson said in prepared remarks. “As the saying goes, you can’t have your cake and eat it too.”
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JPMorgan Chief Expected to Play Down Trade Risks at Hearing
BY BEN PROTESS AND JESSICA SILVER-GREENBERG
When JPMorgan’s chief executive, Jamie Dimon, appears Wednesday on Capitol Hill, he plans to play down the risky trading activities that have already prompted at least $3 billion in losses.
In prepared testimony for a Senate hearing into the trading mess, Mr. Dimon called the losses an “isolated event” that would not hurt customers or taxpayers. While apologizing for various mistakes, he explained that risk was unavoidable in the banking business, and ultimately the firm’s capital position and diversified model “did what they were supposed to do” and protected the company against unexpected losses in one area.
Those internal systems will be scrutinized by lawmakers. At the hearing on Wednesday, the Senate Banking Committee will focus on the firm’s risk controls and management oversight. In particular, the committee, led by Tim Johnson, Democrat of South Dakota, will take aim at statements by Mr. Dimon, who publicly dismissed concerns about the risky trades just a month before disclosing the multibillion-dollar losses.
“How can a bank take on ‘far too much risk’ if the point of the trades was to reduce risk in the first place? Or was the goal really to make money?” Mr. Johnson said in prepared remarks. “As the saying goes, you can’t have your cake and eat it too.”
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Read more: http://dealbook.nytimes.com/2012/06/12/jpmorgan-chief-expected-to-play-down-trade-risks-at-hearing/
5 replies
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= new reply since forum marked as read
Warning of another sternly worded letter the time after next, if this should continue.
