WASHINGTON -- Jamie Dimon, beyond his extraordinary wealth, doesn't have much to be happy about lately. But he can take solace in at least one lucky bounce: Elizabeth Warren wasn't on the Senate panel before which he appeared Wednesday to explain his bank's staggering multibillion-dollar trading loss.
JPMorgan Chase's loss has reinvigorated advocates of Wall Street reform, who had warned that the 2010 Dodd-Frank legislation would not rein in the riskiest activities of major banks, which continue to operate with an implicit taxpayer guarantee.
If she were on the Senate Banking, Housing and Urban Affairs Committee and given an opportunity to question Dimon, Warren, the woman behind the Consumer Financial Protection Bureau, told HuffPost that she would keep it simple.
"Do you get what is wrong? Do you get why people are mad?" she said she would ask Dimon. She would also challenge him on why it's legitimate for him to hold a seat on the board of the New York Federal Reserve Bank: "Will you resign from the New York Fed?"
The New York Fed allows private bankers to sit on its board, even while it crafts bank policy and puts together financial industry bailouts.
"There's a conflict of interest here. You serve two masters. You can't draw this extraordinary salary from JPMorgan Chase and, at the same time, say, 'Oh, I'm out here acting in the public interest.' You can't do both," Warren said she'd tell Dimon.
"He says he wants to take responsibility. Then show some responsibility. Show you get it. Putting Wall Street bankers on the Federal Reserve Board is like finding the guys who torched the entire town and putting them on the fire advisory board. It makes no sense," she added.
Warren, a longtime consumer advocate, is credited with the idea that became the Consumer Financial Protection Bureau, a piece of financial reform enacted in 2010. President Barack Obama put her in charge of setting up the bureau, but declined to name her as the permanent chief. She is now running for U.S. Senate in Massachusetts against Republican incumbent Scott Brown.
Warren also took a shot at a common bankers' argument -- that when it comes to regulation, the complexity of their industry requires reliance on Wall Street insiders. "That's the problem with Wall Street. They believe that they're the only people smart enough to understand the rules," she said. "Too many of the Wall Street bankers want to write their own rules, or let's say it another way, they don't want any rules at all. And then if it all comes crashing down, they'll land in the taxpayers' lap, looking for a bailout."
The regulations are so complicated, Warren pointed out, because bankers have lobbied for carve-outs and loopholes to protect existing business practices. "What we need are simpler, more enforceable rules. Why are the rules so complicated? There's the irony. That's the way Jamie Dimon wants them," she said. "Complicated rules open up ambiguity; they open up loopholes."
In fact, she argued, it's not complicated at all: Dimon simply shouldn't be regulating himself.
"Let me get this straight here," said Warren. "The New York Fed, this body that made the initial decision to bail out AIG and that's helping drive the policy that's governing the biggest financial institutions in the country, and Jamie Dimon's on the board? People get that that's not right."
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