Democrats and Republicans spar over regulation at JPMorgan hearing

WASHINGTON -- Democrats and Republicans sparred over the need for tougher oversight of Wall Street as regulators and JPMorgan Chase & Co. Chief Executive Jamie Dimon prepared to testify Tuesday about the bank’s more than $2-billion trading loss.

The hearing by the House Financial Services Committee started out much more sharply partisan than last week’s hearing by the Senate Banking Committee, where Dimon was questioned about the loss.

Rep. Spencer Bachus (R-Ala.), chairman of the House Financial Services Committee, said the most important lesson of JPMorgan’s loss had nothing to do with the “more than 400 rules” enacted by the Dodd-Frank financial reform law. He said it showed that the regulatory system still was too complex -- something the 2010 overhaul did not address.

“Five different regulators who have some supervisory role [over JPMorgan], none of them apparently was either aware of the bank’s hedging strategy or raised concerns,” Bachus said. He noted that nearly two years after the Dodd-Frank law was enacted, regulators still had not finalized the so-called Volcker Rule, which is intended to limit risks banks can take in trading with their own funds.

But Rep. Barney Frank (D-Mass.), the main House sponsor of the financial reform law that bears his name, shot back that Republicans were trying to undermine the law and have proposed cutting the budget of a key regulator, the Commodity Futures Trading Commission.

Rep. Maxine Waters (D-Los Angeles) echoed his criticism.

“Industry complains about all the lingering uncertainty about Dodd-Frank, but the truth is industry lobbying is the central reason for this uncertainty,” she said. “Many of my Republican colleagues in this House are complicit in this effort by failing to give the regulators the money they need to do their jobs.”

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