Dimon “Dead Wrong” To Dismiss Concerns Over Risky Trades

Jun 13 2012 | 2:08pm ET

JPMorgan Chase & Co. chief Jamie Dimon told the Senate Banking Committee his bank had taken on too much risk and that he’d been “dead wrong” to dismiss concern about it as “a complete tempest in a teapot.”

“When I made that statement I was dead wrong,” Dimon told the Senate panel on Wednesday, blaming the former head of his chief investment office, Ina Drew, for telling him the situation was “an isolated small issue” and not “a big problem.”

Dimon claimed the trades undertaken by the CIO were intended to manage risk and comply with new international banking regulations.

The JPMorgan chief, a vocal critic of the so-called Volcker Rule -- a regulation proposed as part of the Dodd-Frank financial reforms that would limit banks’ proprietary trading -- was asked if the rule, had it been in effect, would have prevented JPMorgan’s recent losses. Although he's denied this in past, he modified his views somewhat on Wednesday, saying that, depending on how it was designed, the Volcker rule could have limited the size of the trades that created the losses.

“It may have stopped part of what this portfolio morphed into,” said Dimon.

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