JPMorgan Report Brings Back Calls to Break Up Banks
'Epic breakdown' in oversight led to $6B loss
By Mark Russell, Newser Staff
Posted Mar 15, 2013 6:38 AM CDT
In this file photo, automobiles pass a JPMorgan Chase building in New York.   (AP Photo/Frank Franklin II, File)

(Newser) – A Senate subcommittee report on JPMorgan Chase has slammed America's biggest financial institution so hard for trying to hide $6 billion in losses tied to the "London Whale" fiasco that business analysts are once again talking about the need to break up the biggest banks, reports Bloomberg. JPMorgan “mischaracterized high-risk trading as hedging," says the 301-page report by the Senate Permanent Subcommittee on Investigations, as well as pressured traders to overvalue holdings and hid vital information from regulators—sometimes at the behest of CEO Jamie Dimon. "Too big to fail has been put back on the table," says a former Fed bank examiner. "This suggests that breaking up the banks is a viable idea."

While JPMorgan officials have said they acknowledge mistakes and operated in good faith, the bipartisan report paints a strikingly different picture, describing bank executives yelling at regulators and calling them "stupid," and characterizing the bank's so-called hedge as "make believe voodoo," reports the New York Times. The difference between JPMorgan and previous disasters, such as Enron, WorldCom, or Lehman Brothers, is that JPMorgan is so much bigger, making the meltdown much more dangerous, writes Matt Taibbi at Rolling Stone. "The report confirms everyone's worst fears about what goes on behind closed doors at such companies," says Taibbi, calling the story an "epic breakdown" of banking oversight. The Senate panel grills bank execs on the loss this afternoon, notes AP.

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Showing 3 of 19 comments
bubbahotep
Mar 15, 2013 12:51 PM CDT
Blah, blah, blah.......
ppacimr9ball
Mar 15, 2013 11:04 AM CDT
Take your money out of the banks, simple solution, i did, I was getting 6% intrest when i started using the banking system, now its like 1% - what a joke, i can make more money in a casino, also the new fees kill you, theres a fee for everything now
Drewzy
Mar 15, 2013 10:52 AM CDT
If the shift manager at McDonalds came up 6 billion short at the register, he'd be lokking for a new job. At JPMorgan, he's get a bonus.