U.S. banking laws unable to stop JPMorgan loss: Republican Boehner Posted 2012/05/20 at 11:23 am EDT WASHINGTON, May 20, 2012 (Reuters) U.S. banking reforms could not have prevented JPMorgan Chase &Co's trading losses, and those involved in the activities that wentawry should be held accountable, U.S. House of RepresentativesSpeaker John Boehner said in an interview aired on Sunday. "I don't believe there's anything in Dodd-Frank (financial reformlaw) that would've prevented this activity at JPMorgan," saidBoehner, the top Republican U.S. |
officeholder. He made the commentsFriday in an interview for ABC's "This Week." Last week JPMorgan disclosed that it has suffered at least $2billion in losses due to trades that went bad. The losses fromderivatives trading could widen and have placed pressure on thebank to explain what happened as lawmakers and regulators tussleover rules for Dodd-Frank enacted two years ago. "There's no law against stupidity. No law against stupid trades,"said Boehner.
"And as long as depositors' money wasn't at risk and as long asthere's no risk of a taxpayer bailout, they should be heldaccountable by the market and their shareholders," he said. The 2010 Dodd-Frank financial oversight law was enacted in responseto the financial crisis includes the Volcker rule, which bans banksfrom making speculative bets with company money. But it includes anexemption for trades done to hedge risk. Since the Wall Street giant announced the $2 billion dollar snafu,Democrats have shown more unity and have said it underscores theneed for tougher bank regulation. Congressional Republicanlawmakers, many who voted against Dodd-Frank and have sought torepeal the law, have been more splintered in their response toJPMorgan's losses.
"There are big problems for this law, and it needs-- it needs somebig changes," Boehner said, when asked if he maintains his positionthat Dodd-Frank should be repealed. The Obama administration has avoided criticizing the bank, insteadcautioning the losses highlight the need to protect taxpayers withtough financial regulation. JPMorgan's losses have given regulators a renewed argument fortightening controls on big banks and has placed a focus on whetherfinancial firms should be required to hold more capital to cushionpossible losses. Jamie Dimon, JPMorgan's chief executive officer, has been a criticof increased regulation.
He has made a name for himself among WallStreet executives as JPMorgan has become the largest and mostprofitable U.S. bank. (Reporting By Margaret Chadbourn; Editing by Jackie Frank).
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