mr. chairman, for that question. obviously the loss at jpmorgan chase was a big loss and one thathang you, mr. chairman, for that question. obviously the loss at jpmorgan chase was a big loss and one thatang you, mr. chairman, for that question. obviously the loss at jpmorgan chase was a big loss and one thatanhang you, mr. chairman, for that question. obviously the loss at jpmorgan chase was a big loss and one thatkhang you, mr. chairman, fhang you, mr. chairman, for that question. obviously the loss at jpmorgan chase was a big loss and one thatnkhang you, mr. chairman, for that question. obviously the loss at jpmorgan chase was a big loss and one thatang you, mr. chairman, for that question. obviously the loss at jpmorgan chase was a big loss and one thatng you, mr. chairman, for that question. broader financial system. what's clear is that the lessons that we all learned from what happened at jpmorgan chase will serve as important lessons, insights into the range of dodd-frank implementation work to come, whether the volcker rule or questions a

i now recognize shelby for his statement. >> i represent jpmorgan chase mr. jamie dimon. mr. dimon is here because jpmorgan chase lost more than $2 billion on derivatives trades. normally it is not and i believe it should not be a role of congress to second guess decisions by private sector business however, this committee has a responsibility to ensure that banks do not unnecessarily put taxpayers at risk. congress has, in large part, delegated the responsibility of oversight to our financial regulators and they are supposed to be monitoring the activities of banks like jpmorgan chase to ensure that they operate in a safe and sound manner. as we learn from the most recent financial crisis and this particular incident, regulators do not always meet our expectations. banks take risks because that's what they do. usually those risks are beneficial because they enable americans to buy homes, attend college, and save for retirement. when banks fail to prudently manage those risks, serious problems can arise. for example, some banks claim that they can safely provide mortgages with

mr. jpmorgan, in your words, performed a poorly constructed hedging strategy. i'd like to focus, however, on jp morgan's role in the days leading up to the bankruptcy, losing more than a billion dollars in client funds when jp morgan was required by law to protect. what mf global treasury edith brian described as a show game. they saw their funds wiped away overnight in this so-called shell game and the firm's failure to segregate these funds. though mf global's commodities customers have received about two cents on the dollar back, the trust that many commodities have in the system has been broken because of the firm's violation of the law as well as their failure to segregate client funds which is the bedrock of commodities trading. we have new information on the release of mf global's trustee's gibbons recommendation last week, and we need to get to the bottom of this issue to ensure that montana farmers and ranchers see their funds returned, and those responsible for the breach of segregated customer funds are held accountable. over 100 of my constituents h

and the very fact that jpmorgan chase and mr. dimon was taken by surprise in this, it get out of his control, i believe if you look at the various lines of business of jpmorgan chase, of others banks, you would find it would be unlikely this could happen in any other line of business. derivatives are a particularly complex, highly leveraged and until our legislation is fully implemented, obscure. and that's the point. this is an example and as yes, we're not micro managing jpmorgan chase. what we are saying is the fact that mr. dimon and this bank were taken by surprise and lost so much money so quickly didn't fully understand what they were doing, and made the choice when they were confronted with a problem not to try to wind the position down, but in fact to expand the use of derivatives so that good derivatives would come to the aid of bad derivatives, multiplying the error. these are arguments for the kind of regulation we need. it did not cause a systemic problem here. but waiting until it happens -- the question is, does thi

mr. jamie dimon is the chairman of the board, president and chief executive officer at jpmorgan chase and co. mr. dimon, your full written statement will be included in the record. please begin your testimony. >> chairman johnson, ranking member shelby, and members of the committee, i am appearing today to discuss recent losses in a portfolio held by jpmorgan chase's chief investment office cio. these losses have generated considerable attention, and while we are still reviewing the facts, i will explain everything i can to the extent possible. jpmorgan chase's six lines of business provide a broad array of financial products and services to individuals, small and large businesses, governments and non-profits. these include deposit accounts, loans, credit cards, mortgages, capital markets advice, mutual funds and other investments. what does the chief investment office do? like many banks, we have more deposits than loans -- at quarter end, we held approximately $1. cit -- billion in loans. cio, along with our treasury unit, invests excess cash in a portfolio that includes treasuries, age

mr. chairman, and thank you, witnesses. one of the issues raised by the jpmorgan risk management losses is the role of the risk management in the small banks and the large banks. as you know, i have fought to have in dodd/frank, a provision to require all banks with over $10 billion in assets and all non-bank financial firms supervised by the fed to have a separate risk committee that includes at least one quote risk management expert having experience in identifying, assessing and exposing risk management. and you say in your testimony, quote, that you will adhere to the highest risk management, end quote, and in your assessment did the jpmorgan supervision have the sufficient risk management personnel to carry tout duties, and in addition, is jpmorgan changing the risk management policy committee, and can you provide the committee with update of the changes and tell us whether the new members of the committee have sufficient expertise. >> the introduction of the risk committee through dodd/frank is a welcomed improvement to overall corporate governance of the fi

mr. curry. jpmorgan the derivative trades made by a group part of the u.s. bank but apparently all booked in london. do you as the u.s. regulator have full access to the information you need trading act tivgty conducted in london if carried out by u.s. bank and what more needs to be done to improve coordination with international regulators to prevent these kind of cross-border losses? >> the london operations at jpmorgan are conducted through a branch of the united states national banks. so in terms of jurisdiction, we have clear jurisdiction over the activities of that branch. in the case of jpmorgan chase, those activities are managed on a global basis through the new york office where we have the majority of our core staffing at the occ. >> okay. good. all right. third question. it's about early warning systems. traders at several hedge funds, we've read in the newspapers, have been able to spot the jpmorgan trade through its ig regular impact on the market for credit driv tiderivatives. begs the obvious question. why didn't the regulators know? obviousl

mr. curry, it is clear from your testimony that jpmorgan lacked the proper controls to mitigate such a large loss. was this a failure in risk management? if so, what should the bank have done differently? >> thank you, mr. chairman. the -- in essence, we believe the issue at jpmorgan chase is one of inadequate risk management within the office of the chief investment office. we have been focusing on potential gaps or deviations from accepted standards of risk management within that particular office and looking to see whether similar gaps exist in any other area of jpmorgan's risk management architecture. >> mr. curry, also dozens and dozens of examiners at jpmorgan. first, did your agency check the risk management and internal controls of all aspects of the bank, including the chief investment office, before this event or did you miss this? and second, while regulatories are not in the position to view every single trade, what assurances can you give us that the bank regulators will be able to monitor situations where large trades, whether done for hedging or other purposes, could bring dow

the ceo of jpmorgan chase, mr. dimon. and, mr. dimon, you are recognized for five minutes but maybe if the cameras will take a picture and then sort of exit. mr. dimon, you are recognized five minutes. we welcome you to the committee. >> thank you, mr. chairman. chairman baucus, ranking member frank and members of the committee, i'm appearing today to discuss recent losses in a portfolio held by jpmorgan ch e chase -- >> could we get him to pull the mike closer. >> reporter: chief investment office. we are still reviewing the facts and i will explain everything i can to the extent possible. the six lines of business provide array of services. these include deposit accounts, loans, credit cards, mortgages, capital market advice, mutual funds and other investments. let me start by explaining what the chief investment offi

the possibility that jpmorgan chase may be too complex to manage which also begs the question is it too complex and too large to regulate. i want to lay out a couple and then finish, mr. chairman. jpmorgan chase in 13 years quadrupled in size from 767 billion in assets, 13 in 1999 to 2.3 trillion today. there are six americans banks that are 800 billion and above. over the last five years alone, you've grown by 400 billion apart from what you just cited. this case demonstrate that in a practical matter neither you or occ could monitor what was happening at a $370 billion chief investment office that if it were standing alone would be the eighth largest bank in the united states. when you have a $2.3 trillion bank with 559 subsidiaries, executives and regulators it appears from listening to you and your comments from watching what's happened and talking to regulators and seeing the occ response, it appears executives and regulators simply can't understand what is happening in all of these offices at once. it demonstrates to me that too big to fail banks are frankly too big to manage and too big to regulate. mr. chairman, i yield back. thanks. >> senator johans. >> tha

the ceo of jpmorgan chase, mr. dimon. and, mr. dimon, you are recognized for five minutes but maybe if the cameras will take a picture and then sort of exit. mr. dimon, you are recognized five minutes. we welcome you to the committee. >> thank you, mr. chairman. chairman baucus, ranking member frank and members of the committee, i'm appearing today to discuss recent losses in a portfolio held by jpmorgan ch e chase -- >> could we get him to pull the mike closer. >> reporter: chief investment office. we are still reviewing the facts and i will explain everything i can to the extent possible. the six lines of business provide array of services. these include deposit accounts, loans, credit cards, mortgages, capital market advice, mutual funds and other investments. let me start by explaining what the chief investment office does. like many banks, we have more deposits than loans. at quarter end, we held approximately 1.1 trillion in deposits and 700 billion in loans. cio along with the treasury unit invest excess cash in a portfolio

mr. jamie dimon, as a chairman of the board, president and chief executive officer at jpmorgan chase and mpany. mr. dimon, your full written statement will be included in the hearing record. please begin your testimony. >> chairman johnson, ranking member shelby and members of the committee, i'm appearing today to discuss recent losses in a portfolio held by jpmorgan chase's chief investment office. these losses have generated considerable attention and while we are still reviewing the facts, i'll explain everything i can to the extent possible. jpmorgan's six lines of business provide a broad array of financial products and services to individuals, small and large businesses, governments and not for profit institutions. these include deposit accounts, loans, credit cards, mortgages, capital markets advice and fundraising, mutual funds and other investments. let me tastart by explaining wh the chief investment office does. like many banks we have more deposits than loans. at quarter end we held approximately $1.1 trillion of deposits and $700 billion in loans. cio along with our treasury

mr. dimon. jpmorgan's ceo facing tougher questions pressed on why the cio risk limits were changed.d those and those from barney frank asking if he would give back some of his own pay. >> the action will be reviewed by the board -- >> just answer the question. >> my compensation is 100% up to my board. >> mr. dimon you said there will be clawbacks for people responsible, is your compensation in the pot? >> he could not tell lawmakers how big the eventual loss will be. >> could be be a trillion dollars. >> not unless the earth is hit by the moon. >> he spoke about derivatives. he says his primary concern is more for the united states because whatever is good for the united states will be good for since bank. he set the tone apologizing for the losses and to lawmakers for taking their time up on this issue. he says their time and his time would be better spent on portion issues facing this country like the ripple effect from the problems in the euro zone. that is when the bank will disclose more on it's findings about the origins for this trading loss. >> so if the earth hits the moon

mr. alvarez said about capital. obviously, that's a theme about how your strong capital position saved us from having jpmorgan from havingbig problem and ensures won't cause the rest of the system a problem and mr. gruen berg from the fdic caused problems and questions you got centered around risk management. is there anything from your internal view that have come out lessons learned other institutions should know? >> i think you all brought up things like models and implementation of models and making sure risk committee is independent minded not just sitting around having a cup of coffee, all those kinds of things. there'll be more than that. >> and mr. frank talked about smart regulation you referred to earlier. we had those five regulators sitting in the seats before you. not one of them really is in charge of the others, don't really coordinate. there were a lot of questions how they share communication. no questions came up from the previous panel about harmonizing the regulations they passed on europe march 29th with europe regulations and don't appear to be lessons learned with other firms after what you go thro

mr. curry, i want to ask you about jpmorgan losing $2 billion and possibly more since the oco is a primary regulator of jpmorgan and the oco has a well deserved reputation for being cozy with the banks that it regulates, and i know you got to the new position, so you have an opportunity here to decide what the occ does in the future. and i find it interesting, you know, what i don't want to see is a repeat of 2008. i know that, you know, a free market is essential to our very economic vitality, but there is a difference of a free market and a free for all market. and in 2008, what we obviously came to the conclusion of is the consequences of a free for all market where the decisions of large financial institutions became the collective risk of an entire country even though they were in part of making those investment and other decisions and then all of us had to pay. and so, you know, i wish we had insisted on capitalization then, and i e wish we had insist odd an whole host of things that had avoided in 2008 because i won't forget that meeting with chairman bernanke and paulson where they

jpmorgan's demise and no cost to the taxpayer. >> yes. that's the objective, yeah. >> thank you. >> senator cole? >> thank you, mr. chairman, mr. dimon. >> i understand that jpmorgan is lending more money to businesses and i appreciate that. however, it appears your bank's lending is not keeping pace with the deposits you're taking in. last year jpmorgan reported that it had $1.1 trillion in deposits. this, of course, is more deposits than any other bank in the united states, but the other big banks reported loan to deposit ratios that are 10 to 20% higher than your banks. it seems like lending to american businesses would be less risky than what was being done in the london office. is your loan to deposit ratio lower than your peer banks because you are, perhaps, prioritizing these risky trading activities over lending. can we hope that you are going to focus more on lending in the american market? >> we are making all the good loans we can in all due haste. we are a global money center bank, and what that means is we have deposits from governments around the world from sovereign entities, from large corporations that can be ta

mr. jamie dimon is the chairman of the board, president and chief executive officer at jpmorgan chase and co. mr. dimon, your full written statement will be included in the record. please begin your testimony. >> chairman johnson, ranking member shelby, and members of the committee, i am appearing today to discuss recent losses in a portfolio held by jpmorgan chase's chief investment office cio. these losses have generated considerable attention, and while we are still reviewing the facts, i will explain everything i can to the extent possible. jpmorgan chase's six lines of business provide a broad array of financial products and services to individuals, small and large businesses, governments and non-profits. these include deposit accounts, loans, credit cards, mortgages, capital markets advice, mutual funds and other investments. what does the chief investment office do? like many banks, we have more deposits than loans -- at quarter end, we held approximately $1 billion in loans. -- $1 trillion in loans and $700 billion in loans. cio, along with our treasury unit, invests excess cash i

mr. diamono. let me sayan that the panel we said there was jpmorgan was hadh sufficient capital and there were no liquidity problems and h deposit money client money was not at risk. mr. chairman, point of order? >> are we going to ask the witness to take an oath and testify under oath or has that process been waived here? poin >> we've nevert done that.here? in my mind, i see no reason. d >> i object to that, sir. >> okay. i see noat reason to place this witness under -- this is not ato criminal proceedings or even a t sieve civil proceedings. he's voluntarily come beforepree us.di at this time, mr. man disiew will for five minutes. thank you, mr. chairman for calling the hearing. mr. dimon, in the last paragraph of your written testimony,mr you've written all of these activities come with a risk and just as we are remained focus oh serving our clients we have also remained focus on manning the risk of our business, particularly given today'saine considerabled global economic ad financial volatility. i just returned from conference in cope hagueen with members ofr the e.u. parliament discussing i

mr. dimon, thank you for your testimony. the recent jpmorgan loss comes at a time when we have many in your industry complaining about the new regulations that were put in place for the dodd-frank wall street reform act. for good reason the $2 billion plus loss has pressed the pause button on the constant scream of attempted roll backs to dodd-frank. it seems to me that with the recent conviction of a prominent wall street corporate director, wall street firms do not seem to be going out of their way to restore trust with the american people. i understand that jpmorgan will still turn a profit this year, but the size of the loss and the complexity of the trades and macro hedging that caused the loss still gives cause for concern. there needs to be an evaluation of not only prudent regulations but also the broken culture on wall street, a culture that some believe provides perverse incentives to play fast and loose with other people's money. after the crisis there should have been major self-reflection and re-evaluation of wall street. mr. dimon

mr. chairman for the question. obviously, the loss at jpmorgan chase was a big loss and one that will effect share holders. we concur in his judgment that it is not about the solvency of the firm or the stability of the broader financial system. i think what is clear is that the lessons that we all learn from what happened at jp morgan chase will serve as important lessons into the range of dodd-frank implementation work to come whether questions about risk management or capital. risk management, enhanced standard, or capital. this incident under scores the need for us to pay attention to examples like this in order to learn those lessons both with. with respect to dodd-frank in limitation. and the broader limitation of supervision that are ongoing. >> are regulators better coordinated and prepared after wall street reform to deal with external threats to our financial stability and economic growth like a eurozone crisis, what steps are you taking in response to this crisis? >> i think there is no question, mr. chairman, that the existence of the

mr. jamie dimon is the chairman of the board, president and chief executive officer at jpmorgan chase and co. mr. dimon, your full written statement will be included in the record. please begin your testimony. >> chairman johnson, ranking member shelby, and members of the committee, i am appearing today to discuss recent losses in a portfolio held by jpmorgan chase's chief investment office cio. these losses have generated considerable attention, and while we are still reviewing the facts, i will explain everything i can to the extent possible. oforgan chase's six lines business provide a broad array of financial products and services to individuals, small and large businesses, governments and non-profits. these include deposit accounts, loans, credit cards, mortgages, capital markets advice, mutual funds and other investments. what does the chief investment office do? like many banks, we have more deposits than loans -- at quarter end, we held approximately $1 billion in loans. cio, along with our treasury unit, invests excess cash in a portfolio that includes treasuries, agencies, mortg

you agree will be the implications of the recent losses at jpmorgan on the wall street reform that have yet to be completed? >> thank you, mr. chairman, for that question. obviously, the loss at jpmorgan chase was a big loss and one that will affect shareholders, but we concur in his judgment that it is not about the solvency of the firm or for that matter, the stability of the broader financial system. i think that what's clear is the lessons we all learned from what happened at jpmorgan chase will serve as important lessons, insights, into the range of dodd-frank implementation work to come, whether it's the volker rule or questions about risk management or enhanced prudential standards, or for that matter, capital, and i think this incident underscores the need for us to pay attention to examples like this in order to learn those lessons, both with respect to dodd-frank implementation and as i suggested earlier, the broader efforts of supervision that are ongoing. >> secretary wolin, are regulators better prepared to deal with financial threats to our financial stability and economic growth like the euro zone crisis? wha

mr. dimon, thank you for your testimony. the recent jpmorgan loss comes at a time when we have many in your industry complaining about the new regulations that were put in place with dodd-frank graaff -- wall street reform. for good reason, the loss has pressed the pause button on the constant stream of attempted drawbacks to dodd-frank. it seems to me that, with the recent conviction of a prominent wall street corporate director, wall street firms to not seem to be going out of their way to restore trust with the american people. i'm understand that jpmorgan will still turn a profit this year, but the complexity of the trades and hedging that caused the loss still gets -- gives cause for concern. there needs to be an evaluation of not only prudent regulations, but also the broken culture on wall street, a culture that some believe provides perverse incentives to play fast and loose with other people's money. after the crisis, there should have been major self-reflection and reevaluation of wall street. mr. dimon, looking back at this loss, do

mr. chairman. it has come to light that jpmorgan chase changed its value a number of times over the past six months which led to its investment appearing less risky than they really were. are there penalties for failing to disclose this to investors and fcc? >> i think mr. dimon testified in the senate that they changed their risk models all the time. the area we're focused on and concerned about is the change with respect to the model they use for earnings release on april 13th that had the effect of understating the value at risk. >> are there penalties? >> our rules do require that changes to the value at risk model has to be disclosed so part of what we're investigating is the extent of that disclosure whether it was adequate among other things. >> and if you conclude that basically the rules were broken? >> there could be, yes. >> so let me ask you, these penalties apparently were not enough to prevent jpmorgan from such activities. i just would like for you to explain to us how should these penalties be structured to deter such behavior going forward if that is the case? if that was the case?

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. >> i want to show you jpmorgan shares today. mr. dimon is going to be explaining the trading debacle to lawmakers that cost his firm between $2 and $5 billion dollars. we'll have the latest tomorrow. i hope you will catch my interviews with the senate committee members that will be grilling mr. dimon and other guests tomorrow. >> in the meantime, it's good news out of europe, stocks fall, equities rally, so what's going on right now. >> let's get some inside on where trader's heads are at. let me begin right there with you michael, what kind of second half are you expecting? a good rally but is this sustainable? >> no, i maintain my sort positions. charles evans said today he would do some dance and stomp his feet and do everything he can to bring about qe 3 on june 20th, and that's the only solution they have. what they asked the italians to do was borrow in the free market which is $6.21% and loan money to another nation, spain, and get 3% maybe. that's not going to work. that's why you saw cds and the bond yields blow out today.

mr. chairman. i want to ask you about jpmorgan losing $2 billion and possibly more since the occ was a primary regulator and they have a well-deserved reputation for being too cozy with the banks. i know you got to your new position. i find it interesting, what i don't want to see is a repeat of 20 2008. i know that a free market is essential to a very economic vitality, but there is a difference in a free market and a free-for-all market. in 2008 what we came to the conclusion of is the consequences of a free-for-all market. where the decisions of large financial institutions became the collective risk of an entire country even though they were in part of making those investments and other decisions and all of us had to pay. so i wish we had insisted on capitalization then and insisted on a host of things that would have avoided 2008 because i will never forget that meeting where they described largely a series of financial institutions on the verge of collapse and suggested that if they collapse not only would they create a risk to the country, but failure to act to a new depression. i don't want to r

mr. cohen, former at jpmorgan chase, author of "money and power: how goldman sachs came to rule the world." thank you for joining me, my friend. >> my pleasure, michael. >> somebody who used to work at jp morgan, what did you take away from today's testimony? how did it register to you? >> it really registered. the thing that lingers in my mind, michael, how did jamie dimon let this happen? he's known as a micromanager, he was a micromanager when he worked at citigroup, he was a micromanager at bank one. he was a micromanager when he came into jp morgan state. he even stopped the use of black sedans at night when bankers work late. he is a serious micromanager and yet he let this chief investment office with $350 billion of the bank's cash reserves be invested without so much as going to an investment committee meeting in that division to regulate, to figure out what was going on. it's like he said, i'm going to let this ina drew, the chief investment officer who since resigned, i'm going to let her do this. i have a lot of faith in her, i'm paying her $15 million a year and i'm going to

were not micromanaging jpmorgan chase. the fact that mr. -- didn't fully understand what they were doing. and then made the choice when they were confronted with a problem not to try to find the position down so that good derivatives come to the aid of bad derivatives, multiply in the area. these are arguments for the kind of regulation we need. it did not cause a systemic of them here. but waiting until it happens would be a very grave error. so i intend to focus on this and i believe many on our side well. the question is, does this not argue against the proposal to deregulate derivatives and what we see on the part of our republican colleagues is a systematic piece by piece, byte by byte effort to render us unable to play derivatives go right back to where we were before the terrible crisis of 2008. >> i think the ranking member. the chairman of the subcommittee on financial institutions. ms. capito is recognized for one minute. >> thank you, mr. chairman. were here to find about risk management lapses that led to a $2 billion in losses

the ceo of jpmorgan chase, mr. dimon. and, mr. dimon, you are recognized for five minutes but maybe if the cameras will take a picture and then sort of exit. mr. dimon, you are recognized five minutes. we welcome you to the committee. >> thank you, mr. chairman. chairman baucus, ranking member frank and members of the committee, i'm appearing today to discuss recent losses in a portfolio held by jpmorgan ch e chase -- >> could we get him to pull the mike closer. >> reporter: chief investment office. we are still reviewing the facts and i will explain everything i can to the extent possible. the six lines of business provide array of services. these include deposit accounts, loans, credit cards, mortgages, capital market advice, mutual funds and other investments. let me start by explaining what the chief investment office does. like many banks, we have more deposits than loans. at quarter end, we held approximately 1.1 trillion in deposits and 700 billion in loans. cio along with the treasury unit invest excess cash in a portfolio

mr. dimon and for jpmorgan. obviously the tempest in a teapot comment is not the kind of thing that goes over well when you've got unemployment at 8.2%. you have 69,000 jobs created in may. this was a comment, someone who makes millions and millions of dollars a year saying don't worry about it, everything is going to be fine, i think grasping the reality of what he had said in the context in which it lands. this is not a time when everyone in the country is going along their merry way economically. so the 1% which mr. dimon clearly is a part of, when they kind of look down and say don't worry about it, everything's going to be fine, the other 99% take umbrage. i think he was trying to make some amends today. >> here were his comments. >> when it came out, there were so many pieces to it, all we have been urging people is don't think of it as binary. think of it as traffic laws. some cars should go 65, some shouldn't. some streets should be different, some lights should be bright, things should be done right. we

jpmorgan issues and others. i want to just shift the focus for a minute and mr. cordray, i want to talk to you first. the housing credit market continues to be very tight, and i'm hearing a lot of concern about how dodd-frank will reduce credit availability through the proposed rules through qualified mortgage that increases liability and qualified residential mortgage that requires a 20% down payment. i know that last week the cfpb reopened the comment period for the qualified mortgage proposal until july 9th. seeking comments about data that can be used to model the relationship between the borrower's ability to repay and the consumer's ratio to debt -- of debt to income. is it your opinion to discuss this rule? >> so thank you, senator, for the question about the qualified mortgage ability to repay rule. one of the reasons we did reopen the comment period is that we have recently been able to obtain significant amount of data from fhfa that gives us a better window into the mortgage market. we're all, i think, quite concerned and i know all of you are as well about the direction and trajectory of

mr. president. give it a shot. >>> jpmorgan's >>> jpmorgan's ceo jamie dimon jousted with senators today. he told lawmakers he could not defend how a hedging strategy in london turned into a multi billion dollar bad bet. well, our own mary thompson scored an exclusive interview with dimon directly after the hearing today. mary joins us now from washington. first of all, that was one hell of a great interview. i watched it. nicely done. what were your key takeaways? start me off. first of all, he's willing to admit his company made a mistake born out of comply century si at the beach. he put a lot of trust in ina drew, the woman who ran the chief investment office which was the group responsible for the losses. this is apparent. he said there was lax oversight in the group and in risk controls as well. in fact, he told us he signed off on a memo that allowed the group to change the way it measures risk known as var but he doesn't recall signing off on it. listen up. >> i was copied on a memo. it said there was a change in the var model. that will come out. i paid virtually no attention toy

the fact that jpmorgan chase and mr. dimon were taken by surprise, i believe that if you look at the very line of business you would find it to be unlikely that a captain in any other line of business. it is complex and highly leveraged. it is obscure. that is the point. we are not micromanaging jpmorgan chase. it is a fact that they were taken by surprise and lost so much money so quickly in derivatives. they did not understand what they were doing. they made the choice when they were confronted with a problem. they're not trying to wind the project down. it did not cause a systemic problem here. waiting to happens would be very grave error. i intend to focus on this. many on our side will. does this not argue against the proposal to deregulate derivatives in what we see on the part of the public. it is a systematic piece by piece effort to render us and able to regulate derivatives to go right back to where we were before the terrible crisis of 2008. >> the chairman of the subcommittee is recognized for one minute. >>

. >>> on to business now, jpmorgan chase ceo jamie dimon remains under the microscope for his bank's recent failures and risk management that resulted in $3 billion. mr. dimon grilled yesterday by the house financial committee aggressively pressing him for answers. >> is it fair to say that jpmorgan could have losses of a half a trillion dollars or trillion dollars? >> not unless this earth is hit by a moon. >> is gambling investing? >> no. no, it is not. >> what's the difference between gambling -- >> you gamble on average you lose, the house wins is this that's been my experience with investing. that's -- >> i'd be happy to get you better investment adviser. >> why should we allow you to be so big? >> a lot of big reports in the storm. it's convenient to blame them all for everything, but jpmorgan's size and capability and diversification in '08, '09 and 2010 allowed us to continue to do the things you wanted us to do. >> for more on dimon's testimony we go to steve sedgwick live this morning for us in london. steve, a lot of people watching that wonder it's a good show, but will it change anything about the way business is done on wall street? >>

mr. davies. >>> a >>> a big day for jpmorgan as jamie dimon the ceo completes his testimony before the senate banking committee. jpmorgan stock has started climbing again. it is the third strongest gainer in the s&p 500 in a market that is in negative territory. andrew sorkin with us on capitol hill. we're anticipating we can get that exclusive interview with jamie dimon in the wake of that testimony. obviously the traders are with us as well. what do you think of mr. mr. dimon had to say. >> i thought he was a master. he absolutely described his case extremely well. some of the senators elected to go at him aggressively and they weren't properly armed. i think he disarmed them very easily and basically told them where they were wrong. in other words, simon, i thought he was apologetic where he needed to be. but he didn't basically bow down before them. it's positive. it's one of the reasons his stock reacted the way it did. he came out swinging. as i said before this is a $400 or $500 billion portfolio. the losses even if doubled, the $2 billion they talked about back at the beginning of may, that w

jpmorgan, volume twice normal and you can certainly thank mr. dimon. ple down here feel he put on an excellent performance. you could say too many softballs was the performance was excellent. >> looks like around a one-month high for jpmorgan stock. rick santelli, we have a good treasury note auction and ahead of the greek election i guess bonds are pretty well bid. >> not the case about ten hours ago. we're now hovering at the 160 level. about 5:00, 6:00 in the morning, around 170. rates have come down. everybody forgets we also had retail sales today and another very disappointing month. we don't want to forget that. headline down .2 and down ex-autos. we look at stocks down here and they're exactly -- the dow is exactly in the middle of its range. that's usually a nondescript day kind of session and with treasuries we have a selloff almost every morning these days and bid and comes back down so, yeah, another auction tomorrow. lowest yield on record today at 162 on the tens. >> thanks very much, rick. >>> well, dell announcing to pay a dividend to sh

jpmorgan was against it. >> the gentleman's time is up. thank you. mr. garret for five minutes. >> i thank the gentleman. before you came here, the previous panel, one of the cute analogies used was keys to his daughter, he wanted to make sure that there are rules and regulations out there. if not regulators, maybe a cop on the beat. the only problem with that, to try to compare to this analogy, was there was one, two, three, four, five regulators or cops on the beat. each one of them gave basically the same answer. they got to the accident scene afterwards. in each case, they were going to tell us what they're going to do next time. the analogy just really doesn't hold true because we're trying to do obviously better than that. i know you gave the testimony here and back at the senate. your exact quote i had was, with regard to the role of the regulators and what they could and couldn't do, you have to give the regulators realistic objectives. we're not purposely misinforming them. you had -- there was 100 regulators imbedded full time, getting up every day to go to your firm to work. aren't we at a cas

mr. duffy was saying -- he asked you, do you think the regulators can regulate jpmorgan chase. his argument was why couldn't they find this one trade? i think the point -- again, my humble opinion. regulators are there to look overall at the major rules such as maybe minimum capital requirements, maximum leverage ratios, maybe some concentration risk, some rules in place. those three things combined, regardless of whether you have a bad trading day, is it safe to say we could never expect regulators to be able to have foreseen this loss of jpmorgan kpas? >> yeah, i think it's fair to say the regulators do the job, the system will be healthier. most banks will be healthier. the chance of having a systemic collapse will be virtually zero. to expect them to capture any one trade is an unrealistic expectation. >> okay. i happen to agree with that. i don't think regulators will be ever set up to do that for the amount of institutions and the amount of trading and the amount of metrics that would need to be put in place to figure out whether something is a prop trade or not is an unr

not only are banks like jpmorgan too big to fail, they're too big to mr. when you look at jamie dimon who has the reputation of being the best risk manager in the business and his institution can make a mistake like this you see we still have a huge problem on our hands. >> back to the, i guess maybe the tone, i think people were anticipating something stronger. this was in a report today regarding some of the senators on the banking committee who questioned dimon. this is not to say they were soft on him, but they've received a total of $7.9 million in campaign contributions from the financial industry including dimon's bank since 2008. and, of course, this is led bid democratic senator chuck schumer, receiving $5.6 million of that. i'll ask you, does that have the appearance of an impact on what he's asked and how hot the seat is for jamie dimon. >> i think the numbers tell the tale. you hit the nail on the head. another fact is that in the run-up to all the discussion about financial regulation and as the dodd-frank reform act was is being crafted, all