Jamie Dimon apologizes, explains loss before Congress
Jamie Dimon, chairman of the board, president and CEO of JPMorgan Chase & Co. testifies before a U.S. Senate Banking Committee hearing on "A Breakdown in Risk Management: What Went Wrong at JPMorgan Chase?" on June 13, 2012 on Capitol Hill in Washington, D.C.
Follow our real-time coverage of the Senate hearings from Heidi N. Moore with photos, Tweets, related reading, and other tantalizing details from the Senate gallery. Read more.
David Brancaccio: The head of the biggest bank in the country is apologizing for not doing a better job supervising trades that lost the bank billions. Jamie Dimon at a Senate Banking Committee hearing today emphasized that while his shareholders lost money, his clients and taxpayers did not.
Jamie Dimon: When we make mistakes, we take them seriously and we are often our own toughest critic. In the normal course of business we apply lessons learned to the entire firm. But we can never say that we won't mistakes, and in fact we know we will make mistakes. We do believe that this was an isolated event.
Brancaccio: Analysts say the JPMorgan blunder could fuel efforts to implement banking reforms more vigorously. Marketplace's New York Bureau Chief Heidi Moore is at the hearing in Washington. Good morning, Heidi.
Heidi Moore: Good morning, David.
Brancaccio: You've been watching proceedings, what strikes you so far?
Moore: So far the tone of the hearings is what's really interesting. Jamie Dimon has shown a lot of compunction, he says this was a management error. He said he was dead wrong and the senators have been, for the most part, all too eager to support him. One of them called him, rightly so-known as the best CEO in financial services. But there has been a few snarky ones. Senator Menendez said, 'you said that this trade morphed, what did it morph into? Russian roulette?' And that got a giggle from the gallery.
Brancaccio: And Jamie Dimon had a more detailed explanation about why they did these trades in the first place -- the ones that went bad.
Moore: Yes and it was really, really interesting. What he admitted was that JPMorgan made this bet because they expected a global credit crisis. So they would have made money if there was a global credit crisis. The fact that they lost money was because the economy, the world economy, was better than they expected. So maybe it's good for the rest of us that JPMorgan lost that money.
Brancaccio: Because no one was wishing on a global credit crisis even though it seemed to be the bet. Now, did Mr. Dimon promise this will never ever happen again?
Moore: No and he can't, this happens in a lot of banks actually. This was a huge bet and people want accounting for that, but a lot of the senators have been all too eager to call this a blip. JPMorgan and Jamie Dimon have been saying, we're going to try change as much as we can so this doesn't happen again, but in a realistic world there's no way they can promise that.
Brancaccio: Marketplace's Heidi Moore, speaking to us from Capitol Hill, thank you very much.
Moore: Thank you.