Tag Archives: Regulation

Jamie Dimon Wasting Time In Front Of Senate Banking Committee

Today’s event of the day in the business and financial world was certainly JP Morgan’s Jamie Dimon reporting in D.C. to the Senate Banking Committee. A lot of people have probably expected something special coming out of this hearing. Watching and listening to it, from my view, the hearing was for the most part a waste of time. While the committee has the need to demonstrate that they do something, the hearing didn’t really bring this over. It is obvious that many people on this committee actually don’t even understand what this is about and what is discussed, and much more, what Dimon says in his response.

From Dimon’s view, it must be a waste of time. He has to run the biggest bank around and has a schedule that stretches over months. Understandable that at some point in this hearing he was annoyed and bored. It sure is difficult to keep quite when listening to lawmakers that read their questions from paper, word by word. Respect Jamie Dimon, for staying cool.

What do we take from this? In my opinion, the most remarkable statement Dimon made, was the one when he agreed that we need strong regulation and not more regulation. With that statement he stepped on the toes of both parties. Jamie Dimon stated that we have missed out to fix a few holes over time. If this will put a different light on the regulation discussion has to be seen. Dimon’s colleagues from other banks, industry and political lobbyists will probably not like that statement and will try to twist and turn things so that it is fitting the political agenda and pocket.

While many want to undo deregulation, others want to loosen up or at least leave regulation as it is. The problem is, as the past and the newest JP Morgan case show, regulations are clearly not good enough and in some cases make no sense at all. The problem was obviously caused at the time when the financial industry was deregulated in 1999. While deregulation took place, the rules and regulations for the most part were never adjusted to the new circumstances and the new players at the table. With the political stalemate in D.C. and elections in November, it will be some time until something happens, if at all. Until then we will have to calculate in that at any time someone might gamble the house, or the country, away.

JP Morgan’s $2 Billion Loss Raising More Questions – Better Regulation Needed

JP Morgan’s news about a multi-billion dollar loss has crushed the banking industries revitalization and brought up more questions and the need for regulation. Jamie Dimon revealed a $2 Billion loss in JP Morgan’s Chief Investment Office. Obviously the bank got caught in the highly speculative segment of “synthetic” assets. Dimon explained that the net loss after off-setting other gains will amount somewhere around $800 million with potential to grow over the next couple of quarters.

The news has caused new uncertainty and has fueled new regulation supporter’s case. Indeed, regulation and government oversight are two major topics of this year’s election. The country’s economy has suffered a great deal in the aftermath of the financial crisis and continues to do so. JP Morgan’s blunder has not helped in making things better. It has to be seen what is unfolding in this case and what else is attached to it. Usually when things like this happen, someone else comes out of the bushes admitting the same misery.

Considering the damage such business practices cause for the economy and trust in the banking system, there is no way that the system can continue without serious regulation and oversight. Opponents of new regulations attempts to save the status quo now sound more like crying children complaining they can’t have more candy. This will clearly change the course of political campaigns of both parties in the coming election regarding regulation.

The banking industry has already major reputation problems and can hardly draw a positive opinion from Main Street America. Recent careful attempts of some major players to approach the problem and make things better are facing a complete reset with the newest developments. The immediate question for everyone is now, “what else is luring” and what else have people to endure. If there was any trust left or rebuild, it certainly didn’t get better.