Arab Today, arab today dimon in dc preserves wall street’s black box
Last Updated : GMT 13:56:18
Arab Today, arab today
Arab Today, arab today

Dimon in DC preserves Wall Street’s black box

Arab Today, arab today

Arab Today, arab today Dimon in DC preserves Wall Street’s black box

London - Arabstoday

Did Jamie Dimon, the chairman and chief executive officer of JPMorgan Chase & Co, put too much blind faith in Ina Drew, the former leader of the bank’s Chief Investment Office who was responsible for a proprietary trade that cost the firm $3 billion (Dh11 billion) and counting? That is the central question that occurs to me after listening to Dimon alternately deflect questions from and charm the pants off the Senate Banking Committee on Wednesday in Washington. Dimon, of course, did not address that question directly. But knowing how intently he has focused on risk-taking in JPMorgan’s investment bank, regularly attending its risk- committee meetings, and how indifferent he seemed to what Drew was doing — apparently never attending one of her group’s risk- committee meetings — one wonders whether he was too much in the thrall of his $15-million-a-year chief investment officer. “I think the first error we made,” Dimon testified, “was that the CIO unit had done so well for so long” — making billions in dollars of profit over the years — “that I think there was a little bit of complacency about what was taking place there, and maybe there was overconfidence.”More scrutiny He told the senators that the CIO had its own risk committee, which was “supposed to properly overview and vet all the risks,” but clearly that did not happen in the particular “synthetic credit portfolio” that incurred the losses. He said the synthetic credit portfolio should have “had more scrutiny. It was higher risk. It was marked to market. It should have had more scrutiny and different limits right from the start.” We now know this did not happen. When Bloomberg News first reported on April 6 about the so-called London Whale — the nickname given to Bruno Iksil, the trader in JPMorgan Chase’s London CIO office who had constructed the fateful synthetic credit trade — Dimon dismissed the reporting as a “tempest in a teapot”. At the Senate hearing, on this point he was contrite: “Let me first say, when I made that statement, I was dead wrong.” It turned out that Dimon had been traveling at the time, and called in to Drew as well as Doug Braunstein, the chief financial officer, and John Hogan, then the chief risk officer at the bank, and was told that they “were looking into it.” He told the senators: “I was assured by them, and I have a right to rely on them, that they thought this was an isolated small issue and that it wasn’t a big problem.” Later in the hearing, after Senator Sherrod Brown, an Ohio Democrat, asked Dimon whether he monitored the CIO, he replied that generally he did. When Brown asked whether he approved of the CIO’s trading strategy, Dimon said, incredibly: “No. I was aware of it, but I did not approve it.” This answer strains credulity. Dimon has a reputation as being a hands-on manager, even going so far as canceling the company’s use of black sedans for employees working late during the financial crisis. He micromanaged traders at Salomon Smith Barney back in the 1990s when he ran that business for his longtime mentor Sandy Weill, one of the architects of Citigroup. How could Dimon not have closely monitored what Drew and her traders were doing in this $350 billion proprietary portfolio that was managing the firm’s excess cash on a daily basis? Did he really have such blind faith in Drew — or did he actually know much more than he is admitting, especially since Drew and two of her London traders have taken the fall for the bad bets? Clever lawyers These are questions that perhaps the House can take up on June 19 when Dimon returns to Washington for more testimony on the matter. In the meantime, what remains abundantly clear is that way too much of what continues to happen on Wall Street takes place in a financial black box. The Securities and Exchange Commission and the Commodity Futures Trading Commission need to wrestle the Dodd-Frank rule making apparatus specifically as it pertains to derivatives and proprietary risk- taking — away from the clever Wall Street lawyers and lobbyists and back to the representatives of the American people, because we are the ones who always end up having to clean up Wall Street’s messes. At one point early on in the hearing, Senator Richard Shelby, an Alabama Republican, asked Dimon what he had learned from “this debacle.” The smooth-as-silk Dimon answered: “I think no matter how good you are, how competent people are, never get complacent in risk. Challenge everything. Make sure people on risk committees are always asking questions.” He added: “In the rest of the company, we have those disciplines in place. We didn’t have it here. And that’s what caused the problem.” The lingering question for Dimon is why he let Ina Drew’s CIO get away with a lower level of oversight than everyone else.from gulfnews.com

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today dimon in dc preserves wall street’s black box Arab Today, arab today dimon in dc preserves wall street’s black box

 



Arab Today, arab today
Arab Today, arab today Kanye West puts hijab-wearing model

GMT 12:22 2017 Monday ,20 February

Kanye West puts hijab-wearing model
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today To release new antiques collection

GMT 20:33 2017 Friday ,17 February

To release new antiques collection
Arab Today, arab today Optimism on the front line

GMT 07:24 2017 Monday ,20 February

Optimism on the front line
Arab Today, arab today Murder of 2 reporters in Dominican Republic

GMT 22:45 2017 Thursday ,16 February

Murder of 2 reporters in Dominican Republic

GMT 16:23 2017 Sunday ,19 February

Global energy news

GMT 16:05 2017 Sunday ,19 February

Trudeau calls for wider social benefit from economy

GMT 05:57 2017 Sunday ,19 February

How do you say déjà vu in Greek?

GMT 05:26 2017 Sunday ,19 February

US natural gas market tightens

GMT 05:06 2017 Sunday ,19 February

Merkel: Euro is too low for Germany

GMT 04:58 2017 Sunday ,19 February

Swedish PM: Brexit deal in 2 years is unlikely
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Kidogo provides childcare for underserved

GMT 20:24 2017 Wednesday ,15 February

Kidogo provides childcare for underserved
Arab Today, arab today Tragic fluctuations of Bakhtiari's life revealed

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Porsche reveals new 2018 Panamera

GMT 17:31 2017 Wednesday ,15 February

Porsche reveals new 2018 Panamera
Arab Today, arab today Egypt to hold first session of Arab film festival

GMT 21:11 2017 Saturday ,18 February

Egypt to hold first session of Arab film festival
Arab Today, arab today Teach monkeys to recognize themselves in mirror

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 07:30 2017 Saturday ,18 February

Actress Nadeen Al Rassi views art as her entity

GMT 06:40 2017 Friday ,10 February

MP calls for removing text from Islamic story

GMT 16:08 2017 Wednesday ,15 February

Shawsh reveals her collection "Jewelry of dreams"

GMT 10:26 2017 Tuesday ,14 February

Emergency UN meeting in Harare

GMT 14:04 2017 Tuesday ,14 February

"Lagom" new Swedish concept in interior design

GMT 12:07 2017 Thursday ,16 February

Bite-mimicking malaria vaccine

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 17:36 2017 Monday ,13 February

Designer prepares to present 2017 collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday