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Dimon to apologize before Congress and detail a complex trading strategy that backfired
NEW YORK (AP) ' JPMorgan Chase CEO Jamie Dimon plans to apologize before members of Congress on Wednesday for a trading loss of more than $2 billion and to say that the bank has taken steps to make sure it does not happen again.
"We have let a lot of people down, and we are sorry for it," Dimon plans to tell the Senate Banking Committee, according to prepared testimony released Tuesday by the bank.
Dimon plans to say that JPMorgan Chase mounted a companywide strategy to reduce risk in December 2011, but that it backfired in one of the bank's divisions by adding risk instead.
Dimon also plans to say that the bank has named a new leader to the division responsible for the loss, has established a risk committee and is conducting a review of what went wrong.
"While we can never say we won't make mistakes ' in fact, we know we will ' we do believe this to be an isolated event," Dimon said in the prepared testimony.
The trading loss has revived Democrats' push for stricter oversight of Wall Street banks, and the Securities and Exchange Commission is reviewing the matter.
Some Democrats have contended that the trades in question would have violated the so-called Volcker rule, which will bar large banks from making bets for their own profit.
The rule takes effect in July, and banks will have two years to comply. Dimon has been among the most outspoken critics of the rule.
He and other bank executives successfully pushed for an exemption for banks to make trades for their own profit if they are hedging against risk, as Dimon has contended the bank was doing in this case. Some lawmakers are asking top federal regulators to strip the exemption.