Wall Street Reform Remains in Spotlight
In a published interview ahead of JPMorgan CEO Jamie Dimon’s testimony before the Senate Banking Committee Wednesday, outspoken advocate for Wall Street reform and candidate for the Massachusetts Senate, Elizabeth Warren, gave her viewpoint on a number of issues on Wall Street, that directly or indirectly impact Main Street America. Warren continues to push for the strengthening of financial reform, and has voiced her concern that Congress and financial regulators may let the opportunity for using JPMorgan’s multibillion-dollar trading loss as a motivating factor for tightening Wall Street regulations pass them by.
Reports from the two-hour Senate hearing reveal the Dimon continues to have considerable influence among lawmakers, and while offering an apology for the losses, he defended JPMorgan as “doing what a bank is supposed to do.” Wednesday’s hearing was just one facet of wide-ranging investigations into JPMorgan by regulators and the FBI, focusing on the large bet the chief investment office made on credit derivatives which failed. Dimon reportedly fielded difficult questions with an assurance that upon completion of the investigation by the bank’s board, a decision will be made on which executives, if any, may be targeted for a recovery of compensation.
As a tireless consumer advocate, Elizabeth Warren was the founder of the Consumer Financial Protection Bureau before setting her sights on a Senate run in Massachusetts. Her Senate campaign highlights the contrast between herself and her opponent Scott Brown, when it comes to the Dodd-Frank financial reform bill and the Volcker Rule, with Brown voting for Dodd-Frank conditional to diminishing the power of the Volcker Rule. Warren’s viewpoint is supported by the fact that JPMorgan’s risky trade violated the Volcker Rule – with a profoundly detrimental result.
Warren also draws attention to the fact that American families have lost close to forty percent of their net worth, as revealed in a recent Federal Reserve survey which noted that between 2007 and 2010 the net worth of an average American household dropped from $126,400 to $77,300. She points out that the loss in net worth, amounting to nearly $50,000 could have paid for college tuition, or been put toward retirement funding, and notes that “When companies like JPMorgan load up on risk, they jeopardize the economy for everyone.”