A U.S. Senate panel probing the multibillion-dollar trading loss by JPMorgan Chase & Co. plans to unveil its findings at a hearing this year to press regulators to tighten the Volcker rule, according to three people briefed on the matter.
Staff members of the Permanent Subcommittee on Investigations, headed by Senator Carl Levin, have interviewed JPMorgan officials as well as examiners and supervisors at the institution’s regulator, the Office of the Comptroller of the Currency, said the people, who spoke on condition of anonymity because the inquiry isn’t public.
“Last fall’s proposed rule ignored the clear legislative language and clear statement of congressional intent and allowed for so-called ‘portfolio hedging,’” the lawmakers wrote on May 17. “Now, in recent days, we’ve seen exactly what ‘portfolio hedging’ might mean. This ’JPMorgan Loophole’ is big enough to drive a ’London Whale’ through.”
Levin’s investigations panel is known for the depth of its research and its bipartisan efforts. The subcommittee probed Wall Street for two years following the 2008 credit crisis, issuing a 640-page report that focused on Goldman Sachs Group Inc. and pinned much of the blame on the largest banks for the near-collapse of the financial system.