During the hearing, Dimon told the panel that he has been misinformed regarding a synthetic credit strategy intended to hedge risks, though the strategy “ultimately resulted in even more complex and hard-to-manage risks,” ABC News reports.
Dimon announced the bank’s losses, which may be as high as $5 billion, earlier last month. Dimon apologized to the committee and said that he largely depended on information from Ina Drew, the bank’s London-based chief investment officer, according to The Washington Post.
“We have let a lot of people down, and we are sorry for it,” Dimon said, The Washington Post reports. “We will not make light of these losses, but they should be put into perspective. We will lose some of our shareholders’ money—and for that, we feel terrible—but no client, customer or taxpayer money was impacted by this incident.”
The losses have sparked renewed debate regarding the controversial Volcker Rule, a provision of the 2010 Dodd-Frank Act that seeks to prohibit banks from engaging in proprietary trading—or risky investments with client funds.
Some proponents argue that the JPMorgan losses underscore the need for the Volcker Rule, though Dimon said during the hearing that the rule is “vague” and “unnecessary,” according to ABC News.
Members of the committee solicited Dimon for advice regarding the deficit crisis, the role of regulators and the costs of increasing regulations.
“I believe in strong regulation but smart regulations — not necessarily more regulations,” Dimon said, The Washington Post reports.