Johnson Grills JP Morgan CEO In Hearing
June 13, 2012 5:57 PM
In the financial world, all eyes were on Capitol Hill Wednesday morning. As elected leaders demanded answers for JP Morgan Chase's $2 billion mistake.
The hearing got a late start after a group of protestors shouting "Stop Foreclosures Now" had to be removed from the chambers. Sen. Tim Johnson (D-SD) led the questioning and offered a stern warning to everyone remaining in the audience. He didn't hold back while grilling the company's president and CEO, either.
With calm confidence, Jamie Dimon defended his company's practices to members of the Senate Banking Committee despite the $2 *billion trading loss announced in May.
"While we can never say we won't make mistakes - in fact, we know we will - we do believe this to be an isolated event," explained JPMorgan Chase CEO Jamie Dimon.
Johnson, usually reserved himself, let Dimon have it as the hearing got underway.
"Why was no one watching?," demanded Johnson.
Johnson, chair of the Senate Banking Committee, was the first to throw questions at the major bank's top executive. He focused on reports of abandoned risk-management strategies and on comments Dimon made downplaying concerns in the weeks before publicly announcing the company's $2 billion loss.
"Mr. Dimon, there was clearly a breakdown in risk management at your firm. ... It appears you did not have a full understanding of the trading strategy," said Johnson.
As Dimon explained what went wrong, he argued against further regulation in how banks can trade.
Johnson reiterated his stance that regulation can help and demanded banks take risk managment seriously.