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JPMorgan's Jamie Dimon makes case for 'smarter' regulations

June 13, 2012|By Andrew Tangel
  • Jamie Dimon, shown last year, gave testimony Wednesday about JPMorgan Chase & Co.
Jamie Dimon, shown last year, gave testimony Wednesday about JPMorgan… (Eric Piermont / AFP/Getty…)

Washington — Jamie Dimon again proved himself Wall Street’s able frontman in Washington, but his testimony on Capitol Hill may not head off tougher banking regulations in the wake of JPMorgan Chase & Co.’s risky trading losses.

Dimon, JPMorgan’s chairman and chief executive, appeared at ease with lawmakers as he fielded questions -- some aggressive, but most deferential -- at a Senate Banking Committee hearing Wednesday about his bank’s trading losses of more than $2 billion.

Although the hearing focused on how JPMorgan's embarrassing loss occurred, the two-hour session veered into larger debates over financial regulations -- putting Dimon in a familiar role of Wall Street’s savvy, shoot-from-the-hip spokesman.

“He displayed a knowledge of the issue but was never rattled and never looked arrogant. All around, it was an A-plus performance,” said Jaret Seiberg, a senior policy analyst with financial services firm Guggenheim Partners. “He’s the smoothest guy in banking under fire.”

Dimon argued for "smarter" regulation, as opposed to heavy-handed regulation that might stymie the industry. He also said during the hearing that JPMorgan was investigating the losses and would not hesitate to claw back the paychecks of those found liable.

JPMorgan shocked Wall Street and Washington last month when the bank disclosed that it lost billions in risky derivative trades -- especially because Dimon had earned a sterling reputation by steering the bank through the financial crisis.

The bank’s disclosure has reignited calls for tougher banking rules as regulators are hammering out the specifics of new restrictions under the Dodd-Frank financial overhaul. Critics have since called for tighter restrictions on proprietary trading and even for breaking up the nation’s big banks.

“I think what momentum they had going into the hearing has dissipated,” Seiberg said of supporters of limits on bank size. “Dimon never really gave anyone a chance to make the case that his bank was too big or complicated to manage.”

Wall Street seemed enthused by Dimon’s performance. Analysts said he seemed to have softened negative fallout for the banking industry from JPMorgan’s trading loss.

Even though major U.S. stock indexes lost ground Wednesday, JPMorgan’s stock rose 53 cents, or 1.6%, to $34.30 a share.

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