Despite Jamie Dimon’s efforts to explain away a $2 billion trading loss, proponents of the Dodd-Frank Act were quick to pounce on the J.P. Morgan CEO, a leader of industry efforts to reverse key provisions of the law.
“The argument that financial institutions do not need the new rules to help them avoid the irresponsible actions that led to the crisis of 2008 is at least $2 billion harder to make today,” said Dodd-Frank co-sponsor Rep. Barney Frank, D-Mass.
Sen. Carl Levin, who co-wrote a Dodd-Frank provision, called the Volcker rule, which would ban proprietary trading by commercial banks, took exception to Dimon’s claims that the trade was part of a complex hedging scheme, and would therefore not have been prohibited by the Volcker Rule.
“The enormous loss J.P. Morgan announced today is just the latest evidence that what banks call ‘hedges’ are often risky bets that so-called ‘too big to fail’ banks have no business making,” Levin said.
