By Pam Martens: June 19, 2012
Jamie Dimon, Chairman and CEO of JPMorgan Chase, at House Financial Services Hearing, June 19, 2012
The House Financial Services Committee was in hearing session for four hours today on JPMorgan Chase’s losses and the only thing that was materially different from last week’s Senate Banking hearing was the tie of Jamie Dimon, Chairman and CEO of JPMorgan Chase.
America’s mega banks that are too big to fail are now viewed as too big to manage, too big to regulate and the latest incarnation, too big to tell the truth to the American people for fear of a panic. Repeatedly during the hearing today, Chairman Spencer Bachus, Republican from Alabama, interrupted fellow members of the Committee who attempted to probe the size or specifics of the losses. The impression was that a deal had been made with JPMorgan’s lawyers that these subjects would be quickly shot down by the Chair.
The House Financial Services committee also heard from the siloed regulators overseeing separate pieces of the $2.3 trillion bank: the Federal Reserve, the Office of the Comptroller of the Currency, the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Federal Deposit Insurance Corporation.
Thomas Curry, Comptroller of the Currency, at June 19, 2012 House Financial Services Hearing
Thomas Curry, Comptroller of the Currency, which oversees the national bank which holds the insured deposits, conceded that JPMorgan’s disclosures had been inadequate: “In hindsight, if the reporting were more robust or granular, we believe we may have had an inkling of the size, the potential complexity, the risk of the position.” He said there had been “serious failures” in regard to risk management.
Brad Sherman, Democrat from California, raised the issue that Dimon had not been put under oath for this hearing and had made an erroneous statement to the Committee:
“You put forward the idea that there were $350 billion that you had given to your Chief Investment Office because there weren’t small and medium size businesses in the United States that were credit worthy that wanted the money. And I assure you that there isn’t a member of this panel that couldn’t bring you a hundred small and medium size businesses – credit worthy – in need of loans from you. And instead you took the $350 billion to London. And that’s why we’re here, ‘cause if you had made the small and medium size business loans you wouldn’t be here. And some of that money in London went to the gambling tables in London.”
Congressman Brad Sherman Quizzes Jamie Dimon at June 19, 2012 House Financial Services Hearing
Dimon remained tight lipped throughout the hearing on just how big the losses are currently and whether any of the positions have been unwound. The firm announced yesterday that it would hold a publicly accessible conference call to announce the details of its second quarter earnings on July 13, at which time it is expected that Dimon will provide additional details on the trading losses from derivatives.
For an in-depth article on the losses and the structure of the Chief Investment Office, click here.
