JPMorgan Chase’s regulators will be in the spotlight here on
Wednesday, when they testify before Congress on the bank’s multibillion-dollar
trading blunder and its implications for the future of Wall Street regulation. One of the bank’s primary regulators, the Office of the
Comptroller of the Currency, will face particular scrutiny for its oversight of
the JPMorgan unit responsible for a trading loss of more than $2 billion.
If memory serves us correctly, JPMorgan disclosed the loss from its chief investment office
last month. Just months earlier, top execs from the chief investment
office had traveled to Washington to persuade the comptroller that new trading
restrictions threatened the future of the bank. The execs argued that the
so-called Volcker Rule could prevent the powerful unit from hedging risk
throughout the bank.
….In their testimony before the Senate Banking Committee,
regulators are expected to defend their oversight of JPMorgan, which had
significant sway with policy makers after emerging from the 2008 financial
crisis relatively unscathed. None of the more than 100 regulators embedded in
JPMorgan’s Manhattan headquarters kept daily watch over the chief investment
office, people briefed on the matter have said, raising questions about gaps in
oversight...
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