Dem senator’s response to JPMorgan loss: Strengthen Volcker Rule

{mosads}”What yesterday’s announcement makes abundantly clear is that even JP Morgan, supposedly the best risk manager on Wall Street, can make bets that go spectacularly wrong. This is exactly why the banks that our businesses and families depend [on] for loans should not be in the hedge fund business,” Sen. Jeff Merkley (D-Ore.) said in a statement on Friday. “Moreover, it is essential that bank regulators issue rules that do not permit hedge fund investments by Wall Street banks to be disguised as ‘market making’ or ‘risk mitigation,’ as this case so dramatically demonstrates.”

Merkley urged implementation of the Volcker Rule, a measure in the Dodd-Frank financial reform law that keeps banks from trading risky financial products.

“I ask, once again, that regulators implement without delay a Volcker Rule as intended by Congress, with a clear, effective firewall between hedge fund-like trading and traditional banking.

Merkley, alongside Sen. Carl Levin (D-Mich.), is one of the loudest advocates in the chamber for regulators to speed up implementation of the rule. In late April he and 21 other liberal legislators sent a letter to regulators urging them to hurry up with the rule’s implementation. 

On Thursday, Jaime Dimon, JP Morgan’s CEO, announced on a conference call that the bank had lost $2 billion through a risky bet on derivatives.

Tags Carl Levin Jeff Merkley

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