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The Senate Banking Committee has yet to decide whether it will call JPMorgan Chase officials to testify about the firm's $2 billion trading loss, according to a committee source.
May 14 -
The Massachusetts Democrat argued following the $2 billion loss at JPMorgan Chase that it's time to bring back the division between commercial banking and investment banking.
May 14 -
Two proxy advisory firms are once again urging shareholders at JPMorgan Chase (JPM) to name an independent director as its board chairman.
May 14 -
White House Press Secretary Jay Carney told reporters Monday that the $2 billion loss "reinforces" the need for the 2010 reform law.
May 14 -
A big trading loss at Chase has some community bank CEOs discussing a second tier of regulation for small banks. Other CEOs believe the snafu is yet another black eye for the banking industry. And some point out that the loss is fairly insignificant to the New York company.
May 14 -
JPMorgans flawed value at Risk modeling failed to catch the danger in its Chief Investment Office. But the metrics elevated readings now threaten the banks ability to take risk elsewhere.
May 14 -
That $2 billion trading loss is just last week's headline. Is Chase so big and complicated that no CEO could apply, teach and enforce decency and the smell test?
May 14 -
Shareholders, creditors, counterparties and regulators deserve to know more about the causes of that $2 billion trading loss.
May 14
WASHINGTON — Treasury Secretary Tim Geithner said Tuesday that the $2 billion trading loss at JPMorgan Chase makes a "powerful case" for the financial reforms being implemented under the Dodd-Frank Act.
Speaking at the Peterson Foundation's Fiscal Summit in Washington, Geithner said the JPMorgan loss was one of four serious tests of the financial system since the crisis, including the financial shock from Europe, the collapse of MF Global and the debt limit showdown and subsequent credit rating downgrade.
"This points out how important it is that the reforms are strong enough and effective enough that they can meet that key test," Geithner said, "not to protect shareholders from losses … but to make sure that when those mistakes happen - and they're inevitable - that they're modest enough in size and that the system as a whole can handle them."
"And we're going to make sure that we meet that basic test."
Geithner said he has not spoken with Jamie Dimon since the JPMorgan chief executive revealed the loss last week, which Geithner dubbed a "risk management failure." But he said regulators "are going to take a very careful look at this and make sure we understand what this means" for the broader set of reforms, including the Volcker Rule, capital and liquidity requirements, leverage limits and new derivatives rules.
"The test of reform is not whether you can prevent banks from making mistakes," he said. "The test of reform should be, 'Do those mistakes put at risk the broader economy, the financial system or the taxpayers?'"
The best way to prevent that from happening is to force banks to hold more capital, to bring down leverage and to make sure the rest of the system has better cushions against these kinds of mistakes, Geithner said.
