Senate to ask JPMorgan chief to testify
WASHINGTON — JPMorgan Chase’s embattled chief executive Jamie Dimon will be invited to testify before the Senate Banking Committee to discuss the huge trading losses announced by the largest US bank, a lawmaker said Thursday.
Banking Committee chairman Senator Tim Johnson expressed his intent to call Dimon as a witness at a hearing, but a date has yet to be determined.
Johnson has already announced hearings for May 22 and June 6 aimed at monitoring the implementation of Wall Street reforms, during which key regulators of the US financial system are expected to testify.
He said a bipartisan team of committee staffers has met over the past week with regulators and JPMorgan Chase staff about the company’s actions which led to more than $2 billion in derivatives trading losses.
“Our due diligence has made it clear that the Banking Committee should hear directly from JPMorgan Chase’s CEO Jamie Dimon, and following our two Wall Street reform oversight hearings I plan to invite him to testify,” Johnson said in a statement.
“I encourage all of my colleagues on the Banking Committee to participate in these three critically important and timely hearings, so we can all better understand the facts.”
Dimon, who has seen the bank’s share price tumble in the wake of the announcement, has admitted that the trading scheme was “stupid” but on Sunday downplayed the losses, insisting the company was “still going to earn a lot of money this quarter.”
The scheme, originally aimed to hedge risks, appears to have evolved into a big, aggressive and complex bet on the direction of the economy that went spectacularly wrong.
The White House and members of Congress have stepped up pressure for tighter regulation of the banks, including a broad ban on the speculative proprietary trade that has hurt many of them in the derivatives markets.
On Wednesday night The New York Times, citing people with knowledge of the situation, reported that JPMorgan Chase’s losses have recently surpassed the bank’s $2 billion loss estimate by at least $1 billion.