Warren: Wall Street waging ‘guerrilla war’ against regulations

Democratic Massachusetts Senate candidate Elizabeth Warren repeated calls for JPMorgan CEO Jamie Dimon to step down as a director of the New York Fed and said the loss of $2 billion in errant trades at the banking giant was proof Wall Street had not learned any lessons from the financial crisis.

“This is about accountability. Banks have been loading up on risk and they don’t want to be accountable,” said Warren on CNN’s "Starting Point" on Monday. “Jamie Dimon is CEO not only of JPMorgan Chase, but he holds this position of public trust advising the New York Fed on how to regulate risk for these large financial institutions, like his own financial institution.”

Warren first called for Dimon to step down on Sunday, in a statement where she said that his resignation from the New York Federal Reserve board would “send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability.”

On Monday, Warren, who rose to fame as a consumer advocate and was Obama’s initial choice to head the Consumer Financial Protection Bureau (CFPB), hammered Wall Street for resisting stronger regulations, which she said would prevent risky financial practices.

“It’s a real point about attitude here. And this isn’t personal to Jamie Dimon, it’s about what’s been going on ever since Dodd-Frank passed,” said Warren. “There’s been a guerrilla war out there in which the largest financial institutions have been doing everything they can to make sure that financial regulations don’t get put in place, and if they do get put in place, that they’re loaded with loopholes and not very effective.”

Warren helped establish the CFPB, but opposition from many Republican lawmakers led President Obama to recess-appoint Richard Cordray to be the agency’s first director. Warren has since been a frequent critic of efforts by the financial industry to ease federal regulations.

“The largest financial institutions don’t want any government regulations. And Washington is a place where money talks, and Wall Street has plenty of money to spread around — they have hired an army of lobbyists to make sure that the laws are friendlier to Wall Street than they are to the rest of the country,” she said.

Democrats have leapt on the losses at JPMorgan to hammer home the need for closer regulation of Wall Street. Dimon, was a vocal critic of the Dodd-Frank financial reform law and the Volcker Rule, which would have limited the ability of banks to use their own funds to engage in high-risk trades.

Dimon on Sunday said that the missteps at JPMorgan had handed federal regulators more ammunition. “This is a very unfortunate and inopportune time to have this kind of mistake,” he said on NBC’s "Meet the Press."

Warren said the missteps at JPMorgan confirmed that the attitude at Wall Street’s biggest banks had not changed after the financial crisis.

“The problem is a combination of size and attitude. They’re too big, there’s just too much power concentrated in a handful of institutions and it’s also that they have the attitude of 'Just leave us alone, we’ll manage our risks internally, we’ll take care of it all ourselves. We’ll come back to you only if things go wrong and we need some help and we need a bailout.'

“We can’t run an economy that way. We can’t run a country that way.

“I’m somebody who really believes we should have boring banking,” added Warren. "That banking should be, the parts that should be about savings accounts and checking accounts, our money system should be separated from the kind of risk-taking that Wall Street traders want to take.”

Warren also responded to questions from the campaign of her opponent, Sen. Scott Brown (R-Mass.), suggesting she has misrepresented claims of Native American ancestry.

Warren was listed as a minority professor at two law schools where she taught, leading some Republicans to suggest that her claimed ancestry may have been used to help further her career.

“I’m proud of my Native American heritage; I’m proud of my family,” said Warren. “It’s now the case that people have gone over my college records, my law school records, every job I’ve ever had, that I got my jobs because I’ve worked hard, I’ve been a good teacher.

“What this is really about is that the economy, middle-class families, working families are being hammered, and Wall Street wants to change the subject, Scott Brown wants to change the subject, Washington wants to change the subject.”