News

JPMorgan CEO Dimon to testify before Congress on trading losses

Jamie Dimon

JPMorgan Chase & Co. CEO Jamie Dimon is expected to testify before the Senate Banking Committee on Wednesday regarding the company’s $2 billion-plus trading losses that were the result of portfolio mismanagement.

The losses cut approximately $27 billion from JPMorgan’s market value, ultimately triggering several federal investigations and multiple congressional hearings with Dimon. Blackstone Group CEO Stephen Schwarzman, however, does not see the purpose of the hearings.

“Occasional losses are inevitable,” Schwarzman said, according to the San Francisco Chronicle. “Publicly excoriating JPMorgan serves no purpose except to reduce people’s confidence in the financial system.”

Since Dimon announced the losses on May 10, the Senate Banking Committee has held two hearings related to other aspects of JPMorgan’s losses. The Federal Reserve, the Office of the Comptroller of the Currency, the Department of Justice, the Securities and Exchange Commission and the Commodity Futures Trading Commission are all conducting inquiries into the trading fumble.

Though the losses have spurred debate within the financial community over whether trading restrictions are tight enough, some participants said that the public simply overreacted. Richard Sylla, a financial historian at New York University’s Stern School of Business, said that managing a large bank like JPMorgan poses significant challenges.

“Even a great banker like James Dimon can’t really manage such a huge operation,” Sylla said, the San Francisco Chronicle reports. “They convince themselves that everything is fine because they’re making money.”

Comments are closed.