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Jamie Dimon's testimony was a wake for Dodd-Frank
President and CEO of JPMorgan Chase Co. Jamie Dimon arrives to testify before a Senate Banking Committee hearing on Capitol Hill June 13, 2012 in Washington, D.C. The committee is hearing testimony from Mr. Dimon on how JP Morgan Chase lost over’s $2 billion in stock market trades.
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Jamie Dimon in front of the Senate Banking Committee. The view from above the gallery.
Kai Ryssdal: It was a packed Senate hearing room into which Jamie Dimon stepped this morning shortly before 10 Washington time. He was invited to explain how his bank managed to lose $2 billion -- or possibly more by the time it's all over -- without him knowing anything about it.
There were mea culpas and apologies, promises not to let it happen again and mostly gentle questioning from the members of the committee. Our New York bureau chief Heidi Moore made the trip down to Washington for the hearing. Hey Heidi.
Heidi Moore: Hey Kai.
Ryssdal: So set the scene for us -- what was the vibe? What was the lay of the land in there?
Moore: Sure. It was an enormous room. Some people had called it "Dimonpalooza," and it was like that. It had this circus-like atmosphere. The room held 300 people, and really the only empty seats, interestingly, were at the front of the room. Clearly, some members of the committee felt like they had better things to do than grill Jamie Dimon, who as you know, has been the favorite son of Washington as far as Wall Street goes.
Ryssdal: Yeah, it was very much Washington's favorite banker coming to town to see them, right?
Moore: Yes. The glow, the aura of Jamie Dimon definitely followed him down here, and the questioning reflected that. They went very, very easy on him.
Ryssdal: Right. Getting to the substance of what was said, Mr. Dimon said a couple of times when he was asked, 'Risk is part of what we do. It is the essence of being a banker.' Did that carry any weight with the committee? Did they need convincing?
Moore: I don't think they needed convincing. If anything, they were all on the same page. And to a certain extent, he's right. If you're a banker, you have to lend, you never know who you're lending to. Risk is part of the job -- to a certain extent. The question we're all trying to answer is: What is that extent? What is the upper limit? Because when you and I talk about risk, we hear the word 'risk.' But increasingly, when you talk to Wall Street bankers about risk, they hear the word 'reward.' And they need a lot of rewards, they need a lot of profits to make up for, you know, what happened in 2008.
Ryssdal: Right. And getting to that and the aftermath, this idea that maybe things don't bode well for Dodd-Frank. Of course Jamie Dimon is going to say when asked, 'You know, I don't know if new regulations have actually done anything good.' But he also said this today, when asked about rules and regulations. Here we go, play it.
Jamie Dimon: A lot of the things that caused the problem don't exist anymore, and that wasn't because of regulations. That was because of markets.
We are now four-something years after the financial crisis, Dodd-Frank is a couple years old -- we're still waiting on it to be fully implemented. Is it doing any good?
Moore: Well, let's just examine Jamie Dimon's statement there for your answer. So he said a lot of those things don't exist anymore. One of the things he mentioned was subprime mortgages. I'm sure it will be news to Bank of America and Citigroup and Fannie Mae that subprime mortgages are no longer a problem, because they're still cleaning up those issues from four years ago. And so the question is: What have we done with that impetus? The time may have passed to use that anger to create the kind of change in the financial system that we needed to create. Dodd-Frank, this was a wake for Dodd-Frank. This wasn't just testimony. They're all gathered in this big room with lots of marble to basically just say prayers over the end of any real impetus to change the financial system.
Ryssdal: Jamie Dimon goes to the House next week. Will that hearing be any feistier?
Moore: The House hearings usually are, just because they're a little bit more chaotic, and the House tends to be closer to the people. But again, you have the Jamie Dimon aura, and you have the same issue, which is no one wants to confront the embarrassment of financial reform that has not come to fruition. And I doubt that the House is much different on that front.
Ryssdal: Interesting factoid that I saw online just before I walked into the studio: There was a picture of Jamie Dimon standing there before his testimony, wearing White House presidential cufflinks. Chutzpah, baby. All right, Heidi Moore in Washington for us today. We'll see you later.
Moore: See you later, thanks.
Dimon's testimony is a clear demonstration of why America will continue to sink. Those who are a huge part of the cause of the world wide economic problem sat there in the room. These corrupt politicians and the vile Mr. Dimon need look no further than in the mirror to see the problem. They need to quit blaming Europe and look at the truth of their own culpability. Your report, with its reverence for Mr. Dimon and his fellow scoundrels adds to the problem by neglecting to play the responsible media role as a critical watchdog on a corrupt government and the thieves who rape the American people and the world economy.
Socialist-Capitalist is mostly correct; as far as it goes.
We can not fix a system that has become amoral.
There are no solutions of a political, or economic nature that will have one iota of an effect, until a solution of a spiritual nature is found, and implemented.
See the dirt behind the scenes!! See how this suit wearing windbag along with his paid Congressional lackeys deceive the rest of us!! Warning-this book is the real deal!!!
https://www.smashwords.com/books/view/85207
This Heidi-Kai story was pretty appalling. In its happy-talk tone of having fun at the catastrophe, Marketplace has apparently returned to telling the uproarious story of Wall Streets risks and riches.
1) Banks used to be about incredible conservatism and carefulness---you proclaim that banks are about wild and crazy risks and rolling the dice and, oh, maybe, just a soupcon of carefulness. Please stop living in an exclusively post Glass-Steagall universe. You are describing WALL STREET and the special world of INVESTMENT BANKING, NOT the world of "banking" per se, certainly not as it pertains to the lives of ordinary Americans.
2) The so-called death of Dodd-Frank is reported as a joke well-enjoyed by all. Perhaps so, at least in in that cloistered room of rich buddies, but you should question what that means. Why would they be so happy to write off regulation and reform? NOT ONE WORD about the anti-regulation, anti-reform impulse but to say these old fat cats and their bought politicians are holding a drunken wake. And Heidi happily reports that Wall Street does not want to do much serious banking (haha) until they have a chance to "be confident" (magic phrase of Wall St.) to make some real money considering all they lost in that big bad catastrophe of a couple years back -- WHICH THEY CAUSED! WHY was this not noted observed and noted for its monumental irony and self-serving obliviousness?!?
Granted, reporters just report what they see and hear, and can't be expected to offer any analysis or critical thinking---let alone historical context---or should they? We can get rip-and-read silly versions of the news from shock jocks.
But you are serving your masters, and the happy talk formula is not being-at-one with middle America---it is laughing at it and continuing the Wall Street 1% cover-up of their overwhelming influence in America. Right down to those cuff-links, which was a telling but incomplete observation. I am not a conspiracy nut, or extremist but a moderate historian of American history and the superficial silliness of your stories is really shocking.
It is disgusting that an arrogant SOB like Dimon could declare regulation useless and ineffective and get away with it. Any other CEO who presided over a failure of internal controls and management like his most recent lapse would resign. At least we will not rescue his bank the next time it needs us ... or will we?
