Sen. Bob Corker of Tennessee has called for a Congressional hearing into the $2 billion trading bungle at JPMorgan Chase, and it looks like he's going to get one. (Video after the jump.)
The Senate Committee on Banking, Housing, and Urban Affairs said it will host a series of additional hearings on financial reform over the next few weeks, and it expects to address JPMorgan's loss.
The Republican senator, who voted against implementation of the Dodd-Frank set of financial regulations, called for the inquiry last week, saying in a statement “clearly the losses posted by JPMorgan are significant, and as policy makers we should understand in detail what has transpired.”
That view coincides with President Obama’s comments on the incident, as well as the financial institution's chief executive Jamie Dimon, but not with others on the conservative right.
Over at The Wall Street Journal, law professor Jonathan Macey argues that there’s nothing to see here and no one should care about the loss except for its stockholders and executives. And The Washington Post’s Right Turn blogger Jennifer Rubin concurs with a piece entitled “JP Morgan’s losses are none of our business,” in which she argues this is simply a knee-jerk reaction, mostly by those on the left.
Corker, a member of the Senate Banking Committee, explained why that kind of attitude is dangerous today while speaking on Andrea Mitchell Reports today. The senator said that this “real-time” example could help regulators examine whether or not they are on the right path with a set of regulations on the financial services industry yet to be fully implemented.
“The question is if the Volcker rule was fully implemented, would this trade have been permissible or not?” he said. “I just think it would be very good for the Senate Banking Committee to have to dig into this issue and to understand and to see if the policies that we’ve creating have been appropriate.”
He continued on to note he understands that “in business there are going to be wins and losses,” but the point is to use this example to examine how proposed legislation could have helped – or not.
The Volcker rule is part of the 2010 Dodd-Frank financial reform law aimed at stopping banks from making certain bets with the institutions’ own money. Regulators were expected to meet today, May 15, to discuss final language of the rule, according to Reuters.