J.P. Morgan will face its first of several congressional hearings today, meeting with the Senate banking committee on derivatives. J.P. Morgan CEO Jamie Dimon will not be testifying.
Securities and Exchange Commission (SEC) Chairman Mary Schapiro and Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler will testify on the implementation of the derivatives regulation before the Senate Banking Committee, in a panel called, "Implementing Derivatives Reform: Reducing Systemic Risk and Improving Market Oversight."
The hearing is scheduled for 10:00 AM-12:00PM and will take place in the Dirksen Senate Office Building.
PolicyMic will be covering the committee hearing live. For real-time updates, refresh this page.
BACKGROUND: According to the committee website, the panel will look at "reducing systemic risk and improving market oversight."
The hearing is attracting attention in light of the recent scandal at J.P. Morgan Chase, which accounted for a combined $3 billion loss. According to the New York Times,
"But in the wake of JPMorgan Chase’s stunning trading loss, now reportedly at $3 billion and counting, committee members need to push the regulators testifying — and each other — to explain why, four years after the financial meltdown, speculative trading in these risky instruments has not been reined in.
The Dodd-Frank law was supposed to bring much-needed oversight to the multitrillion-dollar market for derivatives, including transparent trading, mandatory reporting and higher capital and collateral requirements. But banks, with help from lawmakers in both parties, have lobbied regulators to delay and weaken the rules.
One of the first questions Ms. Schapiro and Mr. Gensler should be asked: What sort of rules would have stopped JPMorgan from engaging in the risky trades that led to its multibillion-dollar losses?"