Dimon Gives Regulators Ammo

JPMorgan chief’s remark bolsters case for tougher Volcker Rule.

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon conceded a key point when pressed by lawmakers about a proposed ban on proprietary trading at banks: Had the rule been in place, it may have prevented the firm’s recent $2 billion loss.

The ban “may very well have stopped parts of what this portfolio morphed into,” Dimon said yesterday in testimony to the Senate Banking Committee.

‘Traffic Laws’

“Think of it as traffic laws,” Dimon said. “Some cars should go 65. Some shouldn’t. Some streets should be different. Some lights should be bright. Things should be done right. We have the widest, deepest, and best capital markets in the world. It would be a shame to shed that out of anger.”

Hedging ‘Boring’

Such a strategy can easily backfire on a bank, said Karen Shaw Petrou, a managing partner at Federal Financial Analytics, a Washington research firm.

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