JPMorgan loss sets off call for rigorous regulation
A surprise $2 billion trading loss by a division of JPMorgan Chase announced Thursday triggered calls today for tougher regulation of banks three years after their near-death experience in the financial crisis. Stock in the bank, the largest in the United States, lost 8% of its value in minutes on Wall Street, and other American and British banks suffered heavy losses as well. JPMorgan Chase says it lost the $2 billion in a trading group designed to manage the risks that it takes with its own money. CEO Jamie Dimon says the bank's strategy was "egregious" and poorly monitored. The disclosure came as a shock to stock analysts and quickly revived debate about whether banks can be trusted to handle risk on their own in the age of "too big to fail." "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," says Rep. Barney Frank, D-Mass. Frank, the retiring Democratic leader of the House Financial Services Committee, says in a statement that the revelation runs counter to JPMorgan's narrative "blaming excessive regulation for the woes of financial institutions." Dimon has been among Wall Street's most outspoken critics of efforts to regulate the financial industry more heavily. Read the full story by The Associated Press here.
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