Tim Geithner: JPMorgan 'Helps Make Case' For Stronger Regulation

WASHINGTON -- Treasury Secretary Tim Geithner said Tuesday that the recent $2 billion trading loss by JPMorgan "helps make the case" for tougher rules on financial institutions, as regulators continue to implement the 2010 law aimed at policing Wall Street.

Geithner said that the Federal Reserve, the Securities and Exchange Commission and the Obama administration are "going to take a very careful look" at the JPMorgan incident as they implement new regulations like the so-called "Volker Rule," which bans banks from making bets with firm money.

"The Fed and the SEC and the other regulators – and we'll be part of this process – are going to take a very careful look at this incident of course, and make sure that we review the implications of what that means for the design of these remaining rules," Geithner said at a Washington event hosted by the Peter G. Peterson Foundation.

Under review will be "not just the Volker Rule, which is important in this context, but the broader set of safeguards and reforms," he added.

Geithner said that regulators will also examine capital requirements, limits on leverage and reforms in the derivatives markets.

"I'm very confident that we're going to be able to make sure those come out as tough and effective as they need to be," Geithner said. "And I think this episode helps make the case, frankly."

Comments

[l78lancer]

02:37 AM on 05/17/2012

Nothing short of Glass Stegall will cut it, and even with that, it would need to include the tricks and gimmicks that exist today. Politically, the dems and repubs are dancing around the issue, but realistically the dems know it to be true.

[Bklein153]

02:27 PM on 05/15/2012

This fool needs arrested

[skibum415]

07:26 AM on 05/16/2012

(Part 1/2)

No law was broken. Even if the Dodd-Frank law that has passed had all of its regulations already written (it doesn't) this wouldn't have been covered. Dimon has said the SEC (under existing regulation - in other words, a law didn't need to be created) could have monitored this type of fund.

Since you tossed out the term 'fool' I want to ask you a question. If you had $100 to your name and that was it and decided to invest $4 of it knowing you had a high probability of making either a great return on your investment (perhaps doubling your $4) or high risk, perhaps losing it all. You ultimately had the decision to invest or not; no one went into your savings account to take your money without permission to use it to invest. In the end the investment went bad, not breaking laws just didn't work out so you popped your parachute and got out with ~$3.

(con't)

[Bklein153]

09:59 AM on 05/16/2012

http://ca.news.yahoo.com/obama-1-million-jpmorgan-chase-204632283.html

the real reason Obama will not prosecute Dimon - HE IS HIS BANKER!!!!

[skibum415]

07:28 AM on 05/16/2012

(Part 2/2)

Perhaps a better example, you only have $10 but after making a purchase you forgot your dime in change at the register.

I hope this will put things into perspective, JPMorgan Chase is valued at $188 BILLION dollars. They invested money and in the end lost $2 Billion. That is the equivalent of you with your $10 losing $.1063829787234043, rounded of course. My point is, at the end of this year, ultimately this will be a rounding error.

Unless you call yourself a fool every time you forget your change at a register.

Sad thing not being reported. The "speculation" they invested in that has turned out to be horrifically wrong was that the American economy was recovering. So, they were investing money to help America and ultimately were "betting" the economy was in recovery. Huh, I guess we are wrong. Based upon what Elizabeth Warren said with this being a foolish investment, how her agency would have stopped this, etc. (she didn't say what the specific investment was) I guess she knew/knows we really weren't/aren't in a recovery to make a statement like the investment was "foolish".

So now we've come full circle with people calling one another a fool. Perhaps Warren is the fool if she believes the economy is not in recovery and is opting to keep that information silent because it will hurt the Progressive President she worked for and the Progressive party she is so ardently attempting to join.

[Bklein153]

08:52 AM on 05/16/2012

Well, we don't truly know the size of the loss - even JPMorgan admitted that $2billion was the low end. And for money that was in my savings account, I would not take any investment that could cause me to loose 25% of my value (in my brokerage account, that is different.) I know that technically no laws were broken with this trade - as none were in the Lehman and AIG implosions - but investor and consumer trust in the Street is at an all time low and that is bad for the economy. What I am for is show trials pure and simple. Yes the legal foundation for such spectacles is weak, but it would not be the first time the US has used them to restore confidence.

As an examples: Special Committee on Un-American Activities, the McCarthy/Robert Kennedy Anti-Communism hearings, the Scope Monkey Trial, The Church hearings on the CIA and assignations, the Kimmel hearings (where FDR shamelessly placed on blame for Pearl Harbor), and any Congressional hearing involving Joe Biden.

As they 'extra-legal' - yes! Do they usually result in righteous convictions - no! Does the masses enjoy them - yes! Are they Constitutional - probably not! Do they help to build confidence and help put the issue to rest - Absolutely!

[turbobore]

02:24 PM on 05/15/2012

Yes Timmy we need more regulations upon the current regulations and then when some unacceptable conduct occurs again in the future you will want more rugulations upon these regulations. Why don't you just go home Timmy and regulate yourself in private.

[mrsmic]

12:33 PM on 05/15/2012

Geithner said that the Federal Reserve, the Securities and Exchange Commission and the Obama administration are "going to take a very careful look" at the JPMorgan incident as they implement new regulations like the so-called "Volker Rule," which bans banks from making bets with firm money.
Sure ya will Timmy..........*Wink Wink*

[Bklein153]

02:29 PM on 05/15/2012

But please keep the campaign checks rolling in Mr Dimon, and we promise we won't issue any more statements you don't like. Just please send the money, we are losing and are desperate!

[Carl Caroli]

12:02 PM on 05/15/2012

Ya think, Timmy? Wall street is like the Indy 500. Everybody's got the pedal to the medal. You know there's going to be an accident but exactly who's involved is a simple matter of luck or lack thereof, timing and reflexes. Many in the audience are there to see the carnage that is pretty much guaranteed at some point. Our economy is not a race, and should not be treated that way.

[cats530]

12:29 PM on 05/15/2012

and the taxpayers are the unwilling "sponsors". So when they crash or destroy their vehicles, we provide funds to replace them/make them whole.

[iam99]

11:52 AM on 05/15/2012

There never was a valid case for deregulation, except for the opportunity to put money into the pockets of the unsavory harvesters.

[Carl Caroli]

12:03 PM on 05/15/2012

And congressman.

[cats530]

11:52 AM on 05/15/2012

Oh look, the Turbo Tax Timmy elf doll now comes in two versions: 1) Flip Floppin' "action". 2) Pull my string to hear me lie.

[mrsmic]

12:35 PM on 05/15/2012

Ha! That was awesome!!!

[philosopherkingtomas]

11:20 AM on 05/15/2012

another reason we cant risk having romney

[turbobore]

02:25 PM on 05/15/2012

Learn how the free market works and then post again next year.