Tea party senator wants JPMorgan CEO to 'guide' Congress on banking regulation

Tea party favorite Sen. Jim DeMint (R-SC) on Wednesday asked JPMorgan CEO Jamie Dimon, who recently announced that his company had lost at least $2 billion in the derivative market, to "guide" Congress in creating friendly banking regulations.

During a U.S. Senate Banking Committee hearing, DeMint told Dimon that lawmakers had no right to judge JPMorgan for their massive losses.

"We can hardly sit in judgement of your losing $2 billion," the junior senator from South Carolina explained. "We lose twice that every day here in Washington and plan to continue to do that every day. It's comforting to know that even with a $2 billion loss in a trade last year, your company still, I think, had a $19 billion profit. During that same period, we lost over a trillion dollars."

"As you can tell, there's a temptation here. Every time something goes amiss, we want to add a regulation, and we've surrounded the banking industry with so many regulations and we still seem to have problems here and there," DeMint added. "I think we do need to recognize that you are a very big bank, the biggest in the world. You've got very big profits. Periodically you're going to have big losses and we need to look at that as part of doing business."

The senator continued by asking Dimon "for some ideas of what you think we need to do ... to allow the industry to operate better."

"I believe in strong regulation, not always more," the CEO replied. "I would prefer a simple, clean, strong regulatory system with real intelligent design. And that's not what we did. We created a really complex, hard to figure out who's responsible, no one could adjudicate between all the various regulatory agencies."

"Obviously as we've seen, the laws and regulations are not necessarily improving things," DeMint agreed. "Some of the things you've done voluntarily -- and other banks -- like capital requirements. I think a best practice -- if we could do anything to encourage the industry to develop a lot of its own voluntary rules, that would guide us a lot better."

"So I guess if I could just leave you with any one thing, if you could come back this time next year and talk about how the industry has put together large-scale, best-practice committees, that would help us keep banking as a private enterprise rather than as a government institution."

Dimon announced in May that his firm had lost $2 billion gambling on derivatives, but only days later, experts said the losses had surged to at least $3 billion.

Watch this video from CNN, broadcast June 13, 2012.