JPMorgan's Dimon says trading losses isolated event
By Dave Clarke and David Henry
WASHINGTON (Reuters) - JPMorgan Chase & Co's (JPM.N: Quote) recent trading losses are an isolated incident and the bank is expected to be "solidly profitable" in the second quarter, Jamie Dimon, the bank's chief executive, will tell the Senate Banking Committee on Wednesday.
Dimon will tell the committee the bank feels terrible about the trading debacle, while emphasizing the losses will only hurt shareholders, not taxpayers, and the bank maintains a "fortress balance sheet," according to his prepared testimony.
"While we can never say we won't make mistakes - in fact, we know we will - we do believe this to be an isolated event," Dimon will say, according to his testimony released by the bank on Tuesday.
Last month, JPMorgan announced that a hedging strategy had gone awry and produced at least $2 billion in unexpected trading losses.
The surprising admission from the nation's largest bank, which is known for gracefully navigating the recent financial crisis, has prompted questions about whether some banks are too big to manage.
Dimon in his prepared testimony did not provide an updated estimate for the losses, but said progress was being made to reduce the risk associated with the trading positions.
Dimon is contrite in his testimony and says the bank did not have proper risk protections in place in the Chief Investment Office where the losses occurred.
He makes clear, however, that the bank remains in solid shape and that the bank's size was not the core problem. Rather, it was a poorly conceived trading strategy that was not reviewed by senior management. Continued...