House’s Frank Says JPMorgan Losses Show Need for Swaps Oversight
JPMorgan Chase & Co. (JPM)’s trading loss of at least $2 billion strengthens the argument against Republican efforts to cut the budget of the U.S. derivatives regulator and ease Dodd-Frank Act swaps rules, said Representative Barney Frank.
“If in a very well-run bank, you can get this loss of several billion dollars -- three and counting, we’re told -- in a fairly short period of time, it’s an indication of the problems with derivatives,” said the Massachusetts lawmaker, the senior Democrat on the House Financial Services Committee, at a hearing today looking into the bank’s trading.
The House Agriculture Committee last month postponed a committee meeting to vote on measures limiting the international reach of the 2010 regulatory-overhaul law’s swaps regulations and allow more derivatives trading to occur in federally insured banks. Financial Services approved the same legislation in March, before JPMorgan’s derivatives losses were disclosed.
Frank criticized Republican efforts to ease swaps rules and limit the budget of the Commodity Futures Trading Commission, “which will, incredibly to me, reduce the amount they have from this year to next year,” he said.