JPMorgan Chase CEO Jamie Dimon faced a grilling by senators on Wednesday regarding the $2 billion in surprise losses incurred by the bank’s chief investment office (CIO) in London.
After being jeered by demonstrators chanting, “Stop foreclosures now!” Dimon told members of the Senate Banking Committee that while he was “ultimately responsible” as CEO for the trading blunder, JPMorgan believes the losses to be “an isolated event.”
Senate Banking Committee Chairman Tim Johnson, D-S.D., noted in his remarks that Wednesday marked the two-month anniversary of Dimon’s “tempest in a teapot” comments, where he “downplayed concerns from initial media reports” of the company’s CIO trades. However, Johnson said, “we later learned…it was an out-of-control trading strategy with little to no risk controls that cost the company billions of dollars.”
Dimon told Johnson that he regretted that statement and admitted several times during the hearing that traders took on too much risk. “In hindsight,” Dimon told lawmakers, the chief investment office’s “traders did not have the requisite understanding of the risks they took.”
“No financial institution is immune from bad judgment,” Johnson said, reminding Dimon and lawmakers of the statements Dimon later made: “We made a terrible egregious mistake. There’s almost no excuse for it…. We know we were sloppy. We know we were stupid. We know there was bad judgment…. [I]n hindsight, we took far too much risk. The strategy we had was badly vetted. It was badly monitored. It should never have happened.’”