Dimon Knew The Risks

JPMorgan Chase execs knew two years ago that its London traders were flirting with too much risk. WSJ: "Interviews with more than a dozen current and former members of the bank's Chief Investment Office, the unit responsible for the losses, indicate that discussions about reining in London traders started as early as 2010. Certain directors were briefed then on a foreign-exchange-options bet that went bad..."

Why wasn't action taken? Dimon. Bloomberg reports: "Dimon treated the CIO differently from other JPMorgan departments, exempting it from the rigorous scrutiny he applied to risk management in the investment bank, according to two people who have worked at the highest executive levels of the firm and have direct knowledge of the matter. When some of his most senior advisers, including the heads of the investment bank, raised concerns about the lack of transparency and quality of internal controls in the CIO, Dimon brushed them off ... Dimon may have to account for his decisions as soon as tomorrow, when he’s scheduled to testify about JPMorgan’s trading loss before a Senate committee in Washington."

Glass-Steagall would "corral Jamie Dimon," argues Salon's Andrew Leonard: "Watching banking lobbyists cut the Dodd-Frank bank reform bill to shreds, with the vocal encouragement of Jamie Dimon, has been a profoundly dispiriting experience for anyone who hoped that a great crisis would bring an opportunity for real change, for a real realignment in the relationship between Wall Street and Main Street ... If reinstating Glass-Steagall would weaken his influence over public policy, that’s reason enough to do it."