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JP Morgan's Jamie Dimon apologises for $2bn losses | |
(about 14 hours later) | |
JP Morgan Chase chairman and chief executive Jamie Dimon has apologised for the bank's $2bn (£1.3bn) losses on high-risk trades. | |
"We have let a lot of people down, and we are very sorry," he said, testifying to the US Senate Banking Committee. | |
He said the losses occurred because traders were poorly managed and did not understand what they were doing. | He said the losses occurred because traders were poorly managed and did not understand what they were doing. |
Protesters disrupted the start of proceedings, with one man shouting, "Jamie Dimon is a crook." | |
Others chanted, "Stop foreclosures now," before being escorted out of the hearing room. | |
JP Morgan accumulated the losses when a hedging strategy, normally used by banks and investors to reduce the risk of losses, went wrong. | JP Morgan accumulated the losses when a hedging strategy, normally used by banks and investors to reduce the risk of losses, went wrong. |
His testimony did not give an update on whether the bank's losses had risen beyond last month's $2bn estimate. | |
But he said that senior bank executives responsible for the losses would probably have some of their pay taken back by the company. | |
"It's likely that there will be clawbacks," he said. | |
Volcker rule | |
Mr Dimon was apologetic, but said the bank remained in sound financial shape, and that the loss was an isolated incident. | |
"Our fortress balance sheet remains intact." | "Our fortress balance sheet remains intact." |
Much of the hearing focused on whether bank executives and financial regulators can spot risks before they grow to the point of damaging a bank or the banking system. | |
Senators asked Mr Dimon whether he believed new trading restrictions - the so-called Volcker rule - would have prevented the losses. | |
Mr Dimon, who has been publicly critical of the Volcker rule in the past, replied: "I don't know what the Volcker rule is. It hasn't been written yet." | |
When pressed further on whether the Volcker rule could have avoided this situation, he said: "It's possible. I just don't know." | |
The Volcker rule aims to limit a bank's trading activity in order to prevent the need for any further government bailouts. | The Volcker rule aims to limit a bank's trading activity in order to prevent the need for any further government bailouts. |
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