JPMorgan CEO Dimon to testify before Congress

Jamie Dimon

JPMorgan Chase & Co. CEO Jamie Dimon will testify in front of the Senate Banking Committee on the bank’s recent $2 billion trading loss that has sparked debate over the necessity of increased regulation.

Senate Banking Committee Chairman Tim Johnson said on Thursday that the committee will invite Dimon to testify before Congress. Johnson did not give a precise date for when Dimon would testify but said that it would likely follow Dodd-Frank hearings set to end on June 6, CNBC News reports.

“As always, we will continue to be open and transparent with our regulators and Congress,” JPMorgan spokeswoman Kristin Lemkau said, according to CNBC News.

Dimon announced the loss last Thursday, adding that the loss was the result of a “flawed” hedging strategy and sloppy, “egregious mistakes,” CNBC News reports.

Dodd-Frank proponents have said that the bad trades are evidence supporting the idea that further and stricter regulation is needed in the financial industry.

One provision of Dodd-Frank, the controversial Volcker Rule, prohibits banks from engaging in proprietary trades. JPMorgan’s loss has ignited industry debate over whether the activities that contributed to the loss would be prohibited under the rule. Dimon has repeatedly warned regulators in the past against instituting the Volcker Rule, saying that doing so would harm the liquidity of the U.S. financial market, according to CNBC News.

Some experts and lawmakers have dismissed criticism of the bank’s loss-related activities, adding that the bank remains stable.

“Even with this loss, I believe they’re one of the most profitable financial institutions in the country and unless the facts are diametrically different from what we’ve heard, there is no risk from this loss to depositors or to taxpayers,” House Financial Services Chairman Spencer Bachus said on Wednesday, CNBC News reports.

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