Dimon Will Tell Congress JPMorgan 'Let People Down' With Trading Loss
"This portfolio morphed into something that, rather than protect the firm, created new and potentially larger risks. As a result, we have let a lot of people down, and we are sorry for it."
That's part of JPMorgan Chase President and CEO Jamie Dimon will tell the Senate's Committee on Banking, Housing and Urban Affairs tomorrow, when it looks into the botched trades that lost the bank $2 billion. Chase released Dimon's prepared remarks this afternoon.
And while it will include that apology, it will also include a couple of defenses:
-- Dimon will say his traders didn't fully comprehend the risks. "In hindsight, CIO's traders did not have the requisite understanding of the risks they took," Dimon says. "When the positions began to experience losses in March and early April, they incorrectly concluded that those losses were the result of anomalous and temporary market movements, and therefore were likely to reverse themselves."
Remember that earlier today, The Wall Street Journal reported that Chase executives and directors "were alerted to risky practices by a team of London-based traders two years before that group's botched bets cost the bank more than $2 billion."
-- In the statement, Dimon says the bank's "fortress balance sheet remains intact."
Dimon adds: "We will not make light of these losses, but they should be put into perspective. We will lose some of our shareholders' money – and for that, we feel terrible – but no client, customer or taxpayer money was impacted by this incident."
As Bloomberg reports, after the loss, Dimon has found himself in the middle of a debate about Wall Street reform, including talk about the "the so-called Volcker rule, which would curb trading by deposit-taking banks, should be tightened."
Dimon is scheduled to testify for two hours tomorrow beginning 10 a.m. ET.
Update at 10 a.m. ET, June 13: The committee is webcasting the hearing here.