Skip to: Content
Skip to: Site Navigation
Skip to: Search


JPMorgan Chase CEO: Shareholders had risk info

JPMorgan Chase CEO Jamie Dimon insisted his bank did its best to inform investors about its risk strategy preceding its $2 billion-plus trading loss. JPMorgan Chase used risk assessment models that provided the best information at the time, according to Dimon.

By Marcy GordonAP Business writer / June 19, 2012

Jamie Dimon, CEO of JPMorgan Chase, testifies before the House Financial Services Committee on Capitol Hill in Washington, on Tuesday, June 19, 2012.

Jacqelyn Martin/AP

Enlarge

Washington

JPMorgan Chase chief executive Jamie Dimon says the bank did its best to fully inform investors about its risk strategy several weeks before it suffered a $2 billion-plus trading loss.

Skip to next paragraph

Dimon told the House Financial Services Committee Tuesday that the bank trusted its methods for assessing risk and that the models used provided the best information at the time. The risk models are frequently updated, he said.

"We disclosed what we knew when we knew it," Dimon told the panel.

The Securities and Exchange Commission is examining whether JPMorgan's earnings report on April 13 gave adequate information on the risk model the bank was using.

Earlier at the hearing, SEC Chairman Mary Schapiro told the panel "there could be" violations that would merit legal sanctions against the bank.

Dimon apologized again for the trading loss and the damage it caused to shareholders. The company has lost about $23 billion in market value since it came to light on May 10.

But Dimon stressed that taxpayers and customers of the bank were not affected by the loss.

The tone of the hearing was more combative than when Dimon appeared last week before the Senate Banking Committee.

Dimon was pressed by four Democrats about the bank's trading operation in London, where the loss occurred. Rep. Brad Sherman asked why the bank devoted hundreds of billions of dollars to that operation when that money could go have gone to small business loans in the U.S.

"We never stopped making loans," Dimon insisted.

He also defended an exemption that allows looser oversight of the sort of derivatives trading overseas that the London operation engages in.

Customers "will go elsewhere if we can't give them the best possible deal," Dimon said. "The main mission of this company is to serve clients around the world."

Rep. Shelley Moore Capito, a Republican, used the hearing to criticize regulators for failing to detect the risks the bank was taking before suffering the loss.

"We need more information about the level of information-sharing among the agencies and how five agencies with a combined 100 or more personnel supervising JPMorgan at the time did not know about the substantial size and risk of these trades," said Capito.

Dimon defended the regulators. He said that if bank couldn't detect the risks, it's unreasonable to expect that the regulators could.

  • Weekly review of global news and ideas
  • Balanced, insightful and trustworthy
  • Subscribe in print or digital

Special Offer

 

Editors' picks

Doing Good

 

What happens when ordinary people decide to pay it forward? Extraordinary change...

Endeavor Global, cofounded by Linda Rottenberg (here at the nonprofit’s headquarters in New York), helps entrepreneurs in emerging markets.

Linda Rottenberg helps people pursue dreams – and create thousands of jobs

She's chief executive of Endeavor Global, a nonprofit group that gives a leg up to budding entrepreneurs.

 
 
Become a fan! Follow us! Google+ YouTube See our feeds!