mr. chairman, and dr. volcker, thank you for being here. i've read comments that you made specifically about the volcker rule. and i know we add clans to talk in advance of this. >> i'm glad somebody read those comments. >> yes, sir, i read them all the time. there's been -- what's happened, i think there's consensus around the fact that prop trade sougt the door. i think that's one of the major contributions that you have made to this debate. what is happening as regulators wres well this and some of the regulators have differing agendas than others, there really are attempts by some to really did away with market making itself. and i think you've had some comments about that. i wonder if in front of this committee you might differentiate between the two and, it's my sense that you had no intentions to do away with the legitimate market making, but prop trading was really the focus of what you were trying to do. >> that is correct. i'm not involved, obviously, in writing the rules. i'm sure it got very complex and maybe an effort to try to

mr. volcker, the group of agencies working on the volcker regulations the 30 pages have indicated they might not be prepared to implement then in july. the two-year time period after the passage of dodd frank. should they hold their deadlines solid and get those rules inch ymted in july? -- implemented in july. >> i'm not clear what their attitude is. i've seen a couple of statements that confused me a little bit. my basic understanding is they're aiming to get the rule out by jewel, whatever the date is. they recognize it will take some time to adapt. they recognize over a two-year period there may be some thingings you want to change. the law also says after july no proprietary trading. so i don't know, somebody tole me some law firm said they can two proprietary trading. it's a very training reading of the law. i won't get into the legal profession at this point. it does seem to be a rather strange, contrived reading. >> thank you. >> it just occurs to me with passage of dodd frank that incorporates the volcker rule and a whole host of other things a complex piece of legislation that at t

mandatory rules and it will not impose simbo comprehensive rules the vocal rule is a good example mr volcker sent to the president a very simple very clear three page letter laying out what the rules should do. now subsequent to that the federal reserve the f.t. i.c. and the o.c. c. all got together and wrote a two hundred ninety eight page commentary on the matter and raise about five hundred questions making it extremely complex that's why i go back to something that's in between sam's view and andrew's view which is limit the government's the positive insurance which would eliminate the preference given to the banks too big to fail create a lot more competition by this the united states once had forty of fifty banks that were competing in different areas of the nation today we have four of five gentlemen i'm going to jump in here we're going to have to go to a short break and after that short break we'll continue our discussion and we forming bad behavior on wall street state party. you know how sometimes you see a story and it seems so you think you understand it and then you glimpse som

mr. volcker, nice to see you. we have three panels. i always give moderate opening statements. i want to thank everybody involved for helping pull together this hearing comments getting such excellent qualified individuals to discuss such an important but broad set of topics. it was not easy. i appreciate the cooperation of all of you who are major players throughout our financial system. i said i will keep my message brief. i am simply saying it is vital we take the necessary steps sooner rather than later to end government policies support and encourage large, complex institutions. that is why i am introducing my legislation that was done formally as the brown/kaufman bill. we know that the full committee's members senator shelby voted against the act in favor of brown/kaufman. thank you to the witnesses that of going to give their comments appeared correct thank you. i enjoy talking to you prior to enjoy your testimony. it i think we all agree that we need a safe banking system. we want one that meets the needs of the 21st century economy. that is the balance we are looking

was one of the voices against a strong version of the volcker rule, but, of course, congressman barney frank now sees this as a big opportunity. >> mred a version of the volcker rule that frankly wouldn't do very much. i think we now have a stronger argument for a volcker rule that says no to a bank. your main job is lending and managing the money of your clients. you should not put your own money at risk. >> the jpmorgan mess is also reminding voters how wall street nearly sent us into a depression four years ago and it gives president obama no doubt an opportunity to do something about it in this election year. but a recent poll should make the president take notice. in five potential swing states, large majorities agree with the statement "president obama has not done enough to hold the banks accountable for their role in the housing collapse." the collapse of the housing market and wall street's meltdown four years ago is still very much in the forefront of people's minds in this country. president obama should be out there, front on this issue, no doubt. especially since mitt romney still doesn't get it. here's what romney said

volcker rule, which was part of the law, hasn't yet taken if he can. it will take effect later this year. technically, no. it didn't violate the rule but mr. newer in saying it wouldn't violate the volcker rule. it depends on the nature of the trade and the nature of the rule. this is going to be an argument for tighter rule. he said, just because we are stupid, jamie dimon isn't stupid. he is a very able guy with a very well-run bank. that's precisely the point. when one of the best run-ins stugss presided over by very intelligent people can make a mistake of this sort, that's a sign of why you need regulation. that's a sign of why you need a safety net. i think this is an argument for the volcker rule. >> some would say, can you regulate greed combined with stupidity? >> yes. you can regulate in this sense. you can, in the first place say, we don't want you to get so over your head that you are not going to be able to pay what you owe other people. the old story is, if somebody owes you -- if you owe somebody $1,000, he can tell you what to do. if you owe him $100 million, he has to worry about you. we do have rules that say we don't wan

mr. dimon wanted a version of the volcker rule that, frankly, wouldn't do much. i think we now have a stronger argument for volcker rule that says no to a bank. your main job is lending and managing money of your clients. you shouldn't put your own money at risk. if you want to engage this this kind of speculative, razzle dazzle -- >> but is that what you -- >> use your own money. >> is that clear to you what happened here, which was a hedge, not your money, buying credit default swaps, morphed into something that was proprietary trading of putting your own money -- >> absolutely. >> -- into the risk? >> yes. >> is that your assumption happened? >> no, i think they acknowledged. it's pretty clear. a hedge against a specific asset going down in price is -- could be supported. this was a general hedge about the economy 37. this was a form of speculating on the economy. look, they couldn't lose $2 billion if it was, you know, this kind of conventional thing. i mean, it's not like they lent $2 billion to borrowers who couldn't pay it. it's clear with this kind of hed

mr. dimon wanted a version of the volcker rule that frankly wouldn't do very much. i think we now have a stronger argument for the volcker rule that says no to a bank. your main job is lending and managing the money of your clients, you should not put your own money at risk. if you want to put your money at risk, if you want to engage in this kind of speculative razzle dazzle sometimes -- >> your own money, is that's what's clear to you happened here that what was a hedge, which is not your money, buying credit default swaps, morphed into something that was proprietary trading of putting your own money into the mix? we know that's what happened or is that your assumption of what happened? >> no, it's pretty clear. a hedge against a specific asset going down in price could be supported. this was a general hedge about the economy. this was a former speculating on the economy. look, they couldn't lose $2 billion if it was, you know, this kind of conventional thing. it's not like they lent $2 billion to borrowers who then couldn't pay it. but we really like banks to be

violation of the volcker rule, and warned against people like jamie dimon lobbying regulators to weaken the rules even before it takes effect later this year. here's carl levin. >> mrgued that the activities which occur outside of the united states should not be subject to dodd/frank or to the volcker rule. this was a lond activity. but, boy, that's a huge loophole as well. so he's fighting for two or three loopholes and just this little bit of language. and we hope that the regulators will not give him any of the ones he's fighting for, because it would undermine the very purpose of dodd/frank. >> senator eleven also criticized republican presidential nominee, mitt romney, who has called for the repeal of dodd/frank. romney said today he favors instead common sense regulation. but carl levin said dodd frank is the only common sense regulation now on the books, and it's urgently needed so americans don't have to bail out banks one more time. >> we don't ever want to bail out banks again. we never should have to bail out banks again. but if they get away with this kind of bet, we're going to be right back in the soup again. we're going to end up either facing econom

mr. dimon has argued that the activities which occur outside of the united states should not be subject to dodd frank or to the volcker rule. this is a london activity. but, boy, that's a huge loophole as well. so he's fighting for two or three loopholes in just this little bit of language. and we hope that the regulators will not give him any of the ones he's fighting for because it would under mine the very purpose of dodd frank. >> now, senator levin, of course, wlo is a democrat in this democrat-led senate also criticized mitt romney, the republican nominee, for calling for the repeal of dodd frank. mitt romney put out a statement saying he supports common sense regulation of derivatives and that the jpmorgan loss underscores the need for that. carl levin said the dodd frank bill is the only law we have to protect against this and it's urgently needed because we can't bail out banks again. here's carl levin. >> we don't ever want to bail out banks again. we never should have to bail out banks again. but if they get away with this kind of bet, then we're going to be right back in the soup again. we're going to end

mr. dimon argues that activities outside the united states should not be subject to dodd frank or the volcker rule, but boy that's a huge loophole as well. he's fighting for two or three loopholes in this little bit of language. we hope the regulators are not giving them any one he's fighting for because it will undermine the very purpose of dodd frank, which is essentially to bring back a cop on the beat on wall street. >> as you know, mitt romney, the presumptive republican nominee, called for the repeal of dodd frank. his campaign put out a statement a short while ago saying this debacle underscores the common sense need for regulation, which i favor. is it possible that common sense regulation of derivatives could succeed in the absence of dodd frank? >> well, dodd frank is a common sense law. it was a compromise law, in fact. this was not a perfect law from any direction. it was a compromise law. and for him to say repeal the only law we have, which is to regulate the excesses of wall street, means we are right back where we started from. no cop on the beat. deregulation. let the market

mr. ryan, go ahead and respond to that, sir? >> we're having a filibuster from michael which i don't think is useful. most of what he says does not water at all. i think the discussion about volckerhe most important thing is this was a mistake. we're not talking about customer money. we're not talking about government money. we're talking about jpmorgan's money and the impact on its shareholders. they've made a mistake. they've been very transparent about it and we don't need regulations to change the way banks do work in the united states. >> do you think the fed was surprised by what happened today? michael said they were but i don't know why they would be. >> i have no idea how michael has all of these sources. >> they were surprised because these are nontransparent secret transactions and they will become transparent if dodd-frank goes into effect. >> wow, we have nasty words. >> well, i was accused of a filibuster. >> we have breaking news. you've gotten to talk a lot, sir. thank you, mr. ryan. >> okay. julia -- julia has breaking news on facebook here. >> yes, that's right. the folks here -- i'm here in palo alto. facebook tells us that the may 18th ipo date is still uncert