Although JPMorgan Chase suffered a
Although JPMorgan Chase suffered a
“This is a stupid thing that we should never have done but we’re still going to earn a lot of money this quarter so it isn’t like the company is jeopardized,” he said in an interview with NBC’s “Meet with Press.” “We hurt ourselves and our credibility, yes — and that you’ve got to fully expect and pay the price for that.”
In response to JPMorgan's trading loss, the Securities and Exchange Commission has begun an investigation into the bank’s trades. Dimon said the company is also doing its own internal investigation.
“So we’ve had audit, legal, risk, compliance, all of our best people looking at all of that,” Dimon responded. “We know we were sloppy. We know we were stupid. We know there was bad judgment. We don’t know if any of that is true yet. But of course regulators should look at something like this. That’s their job.”
“We intend to fix it and learn from it and be a better company when it’s done,” he added.
In the company’s earnings call just a few weeks ago, Dimon dismissed reports that a trader had amassed a large position that prompted hedge funds to bet against the
“So first of all, I was dead wrong when I said that,” Dimon said about his previous remarks. “I obviously didn’t know because I never would have said that. And one of the reasons we came public was because we wanted to say, 'You know what, we told you something that was completely wrong a mere four weeks ago.'”
In hindsight, Dimon said the bank took “far too much risk” in how it managed its securities portfolio.
“The strategy we had was badly vetted,” he added. “It was badly monitored. It should never have happened.”
Although Dimon said he does not agree with all of the provisions within Dodd-Frank , he does support higher capital and liquidity requirements.
“Our biggest exposure — you know what they are? Loans. You’re not going to make (it) risk-free. But we agree with a lot of the standards that are going to make it better,” he said.
Moving forward, Dimon acknowledged that the magnitude of JPMorgan’s trading loss could provide more ammunition for regulators. He added that this is an unfortunate and inopportune time for JPMorgan to have experienced such a mistake.
“This is a mistake,” he said. "We’re going to pay a price for it. I understand it. We deserve a lot of the criticism we’re getting.”
Indeed, some critics have already seized the moment. Rep. Barney Frank, D-Mass., told ABC's "This Week" that he hopes the final version of the Volcker rule will prevent the type of trading that led to the massive loss at JPMorgan.
A piece of the financial regulation known as the Volcker rule would prevent banks from certain kinds of trading for their own profit. Dimon has said the trading involved in the $2 billion loss would not have fallen under the rule.
The $2 billion loss came in the past six weeks. Dimon has said it came from trading in so-called credit derivatives and was designed to hedge against financial risk, not to make a profit for the bank.
Sen. Carl Levin, D-Mich., said the banks will lose their fight to weaken the rule.
"This was not a risk-reducing activity that they engaged in. This increased their risk," Levin told NBC.
"So we've got to be very, very careful that the regulators here are not undermined by this huge effort to weaken the rule by putting in a huge loophole" that includes the trading involved in the JPMorgan loss, he said.
Dimon’s appearance on the show was retaped after news of the trading loss broke. In the original interview, Dimon discussed the topic “is America better off than four years ago?”
Addressing public anger toward Wall Street, Dimon said he wants a more equitable society and does not mind paying higher taxes. But he said attacking all of business is "very counterproductive."
Dimon is likely to face further questions about the trading incident on Tuesday at the company's shareholder meeting.
-AP, Reuters contributed to this report.