JPMorgan Chase’s embattled chief executive Jamie Dimon will be hauled before Congress on June 7 to explain recent huge trading losses, legislators announced Friday.
Dimon will testify before the Senate Banking Committee as committee chair Tim Johnson vowed to “get to the bottom of the massive trading loss.”
Congress, regulators and JPMorgan Chase staff are looking at the actions that led to more than $2 billion in derivatives trading losses.
The hearing is likely to be highly politically charged, a proxy for the battle between Democrats and Republicans over Wall Street reform.
Dimon, who has seen the bank’s share price tumble in the wake of the announcement, has admitted that the trading scheme was “stupid” but downplayed the losses, insisting the company was “still going to earn a lot of money this quarter.”
The scheme, originally aimed to hedge risks, appears to have evolved into a big, aggressive and complex bet on the direction of the economy that went spectacularly wrong.
The White House and members of Congress have stepped up pressure for tighter regulation of the banks, including a broad ban on the speculative proprietary trade that has hurt many of them in the derivatives markets.