Jamie Dimon Will Testify But Don't Expect Much From Him

Jamie Dimon

Photo:  AP

JPMorgan Chase chief Jamie Dimonwill be making a couple of visits toWashington next month.

Lawmakers invited the CEO and chairman of JPM to testify following news that his bank lost over $2 billion on a supposed hedge gone wrong. Dimon will take them up on the offer on June 13 when he testifies before the Senate Banking Committee.

Senate Banking Committee Chairman Tim Johnson says he expects Dimon “to come prepared to provide the Committee a better understanding of this massive trading loss so we can take the implications into account as we continue to conduct our robust oversight over the full implementation of Wall Streetreform.”

Johnson can expect all he wants from Dimon but that doesn’t mean he will get any of it. We’ve seen plenty of Wall Street executives testify before lawmakers over the last few years but it’s not often they provide much insight.

Remember MF Global chief Jon Corzine’s appearance before Congress back in December? Not long after his firm went bankrupt and lost$1.2 billion of client money Corzine testified before the House Committee on Agriculture. When asked about the missing funds (which have still yet to be recovered) the former head of Goldman Sachs said “I simply do not know where the money is or why the accounts haven’t been reconciled.”

He did take responsibility for the incident but that hasn’t meant much for clients who lost money.

None of that is to say that JPMorgan’s mess is anything like MF Global’s. Dimon has been quick to point out that no clients were affected by the $2 billion loss.

Like Corzine Dimon will take responsibility for the loss as head of JPMorgan but will ultimately tell lawmakers that he’s doing everything he can to make sure nothing like that ever happens again. Committee members will ask for details behind the strategy of the bet and question whether it was a legitimate hedge or blatant speculation. Dimon will likely argue it was simply a hedge gone bad and then most certainly point to his bank’s stellar balance sheet as a means to remind the public that JPMorgan is “the good bank” on the Street. In other words, we won’t hear much new information from Dimon.

It gets even better. (Or worse.) Dimon will end up testifying twice as a House Committee is also expected to invite him to talk about the loss.




Full article:  http://www.forbes.com/sites/halahtouryalai/2012/05/31/jamie-dimon-will-testify-but-dont-expect-much-from-him/