Lawmakers are about to get their chance to investigate JPMorgan Chase's deepening trading losses, which now some believe could potentially top that $2 billion number we've reported. This comes as CEO Jamie Dimon prepares to go before the bank's shareholders at the company's meeting today. Among other things they'll be voting on is Dimon's $23 million pay package.
This morning on "Starting Point," Banking Committee member Senator Jeff Merkley (D-OR) weighs in on what the JPMorgan Chase loss means for the banking industry. As a co-author of the Volcker Rule, which is part of a big set of Wall Street reforms passed in 2010, says if it had been implemented by now the rule would have prevented the type of investing that led to JPMorgan's losses.
“This is the type of investing, proprietary trading if you will, hedge fund style investing that specifically the Volcker Rule was designed to prevent," Sen. Merkley says. "If you want to be in the hedge fund business, great, sever your ties with insured deposits and take the big risks and the only people who get burned are your investors or your own funds but don’t do it and try to be inside the banking system, where we subsidize operations and provide loans, liquidity to families and businesses.”
Sen. Merkley also says that the type of investing JPMorgan Chase is engaged in is 'truly high-risk gambling.'