Reid to JPMorgan: Take your business to Vegas

By Peter Schroeder - 05/15/12 03:28 PM ET

Senate Majority Leader Harry Reid (D-Nev.) delivered a message to JPMorgan Tuesday: Take your business to the casino.

After the bank reported it had lost at least $2 billion in a trade gone wrong, Reid told reporters that the firm's investment activity might be more at home around slot machines than on the trading floor.

"I would suggest JPMorgan take their business to Las Vegas," he said. "It is just a gamble.

"It's clear that they were betting like you would do at the craps table ... and they bet the wrong way," he added.

The business of the nation's largest bank has attracted substantial attention ever since it disclosed that a complex trade on corporate debt out of its London office would cost the firm billions. In Washington, it has set off a fresh round of debate on the role of financial regulation, and whether the Dodd-Frank overhaul passed in 2010 now being implemented by regulators is up for the job.

The botched trade is not expecting to pose a risk to JPMorgan or require the government to step in and provide support, but Reid warned that larger losses might still find taxpayers on the hook.

"The problem is the way Wall Street has been working — it's heads they win, tails we lose," he said. "If they make a bad bet Uncle Sam picks it up, and we have to stop that."

However, Reid offered kind words for the bank's head, Jamie Dimon, saying he had the "greatest respect" for him. And he threw barbs at regulators for taking so long implementing rules stemming from Dodd-Frank, in particular pertaining to the "Volcker Rule," which some believe would have prevented the costly trade from occurring.

"They should have been done a long time ago," he said.

Senate Republican Leader Mitch McConnell (Ky.) said the Senate Banking Committee is planning to hold hearings on the matter, and lawmakers will be looking to see "what kind of legislative action is necessary, if any." However, he also noted that regulators still needed to implement substantial portions of the existing law.

— Erik Wasson contributed.