Banksters Still Rule

CEO Jamie Dimon of JPMorgan Chase (shown left) went public with a whale of tale today about how one of its investors, Bruno Michel Iksil, known as the “London Whale” lost $2 billion in bad bets on volatile synthetic credit securities. What is most striking about the story is that Dimon was the executive who led efforts to limit reforms by the Federal Reserve after the last financial scandal. Now he says “There were many errors, sloppiness and bad judgment . . . grievous mistakes, they were self-inflicted.” Sound familiar?

Iksil is also known as “Voldemort” because of the massive power he wielded. Dimon has worked hard to prevent reforms limiting or monitoring such risk-taking enterprises. This includes opposition to the Volcker rule and related reforms.

Now Dimon is expected to blame the whale rather than his own anti-reform position.

  Jonathan Turley

JP Morgan chief executive Jamie Dimon had been crucial in persuading the US government to water down new regulations, in particular the so-called Volcker rule that aims to limit risk-taking by banks considered "too big to fail".

[...]

[A] City trader at the centre of a $2bn trading loss at JP Morgan Chase [...] returned to his home in Paris on Friday as the repercussions of the loss spread across the markets.

Some $13bn was wiped off the value of America's largest bank after it admitted the scale of the trading activities of Bruno Iksil – nicknamed the London Whale for his bullish trading – and his colleagues in the bank's little known "chief investment office".

[...]

Iksil is thought to be one of the highest-paid bankers in London and his New York-based boss, Ina Drew, whose pay has to be published, received $14m last year.

The Financial Services Authority has been informed and will liaise closely with the bank, which had earned an unrivaled reputation for navigating successfully through the 2008 banking crisis.

  UK Guardian

And by navigating successfully we mean grabbing all the life rafts from the peasant taxpayers.

Senator Jeff Merkely [...] said: "This really is a textbook illustration of why we need a strong Volcker rule. In the words of JP Morgan's chief executive, he had a strategy that was, quote, 'flawed, complex, poorly reviewed and poorly monitored'. And if that sounds eerily familiar, it's because it is an exact description of the type of risk-taking that got us into this financial crisis and recession."

[...]

US representative Barney Frank, [...] who gave his name to the 2010 Dodd-Frank law on regulation, said: "This regrettable news from JP Morgan Chase obviously goes counter to the bank's narrative blaming excessive regulation for the woes of financial institutions. The argument that financial institutions do not need the new rules to help them avoid the irresponsible actions that led to the crisis of 2008 is at least $2bn harder to make today."

But who's complaining?

This has occasioned some muted calls for increased regulation of the industry on the grounds that many of these people are avaricious gombeen bastards who should not have another chance at wrecking the world.

[...]

Honest to god, these people.

  Charlie Pierce