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| Former President Clinton signs the bill that repeals key parts of the Glass-Steagall Act as Larry Summers, Alan Greenspan and lawmakers look on. (Getty Images) |
11 May 12
.P.
Morgan Chase & Co., the nation’s largest bank, whose chief
executive, Jamie Dimon, has lead Wall Street’s war against regulation,
announced Thursday it had lost $2 billion in trades over the past six
weeks and could face an additional $1 billion of losses, due to
excessively risky bets.
The bets were “poorly executed” and “poorly
monitored,” said Dimon, a result of “many errors, “sloppiness,” and
“bad judgment.” But not to worry. “We will admit it, we will fix it
and move on.”
Move on? Word on the Street is that J.P. Morgan’s
exposure is so large that it can’t dump these bad bets without
affecting the market and losing even more money. And given its
mammoth size and interlinked connections with every other financial
institution, anything that shakes J.P. Morgan is likely to rock the
rest of the Street.
Ever since the start of the banking crisis in 2008,
Dimon has been arguing that more government regulation of Wall Street
is unnecessary. Last year he vehemently and loudly opposed the
so-called Volcker rule, itself a watered-down version of the old
Glass-Steagall Act that used to separate commercial from investment
banking before it was repealed in 1999, saying it would unnecessarily
impinge on derivative trading (the lucrative practice of making bets on
bets) and hedging (using some bets to offset the risks of other
bets).
Dimon argued that the financial system could be
trusted; that the near-meltdown of 2008 was a perfect storm that
would never happen again. READ MORE
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