JP Morgan's Jamie Dimon apologises for $2bn losses
- 13 June 2012
- From the section Business
JP Morgan Chase chairman and chief executive Jamie Dimon has apologised for the bank's $2bn (£1.3bn) losses on high-risk trades.
"We have let a lot of people down, and we are very sorry," he said, testifying to the US Senate Banking Committee.
He said the losses occurred because traders were poorly managed and did not understand what they were doing.
Protesters disrupted the start of proceedings, with one man shouting, "Jamie Dimon is a crook."
Others chanted, "Stop foreclosures now," before being escorted out of the hearing room.
JP Morgan accumulated the losses when a hedging strategy, normally used by banks and investors to reduce the risk of losses, went wrong.
His testimony did not give an update on whether the bank's losses had risen beyond last month's $2bn estimate.
But he said that senior bank executives responsible for the losses would probably have some of their pay taken back by the company.
"It's likely that there will be clawbacks," he said.
Mr Dimon was apologetic, but said the bank remained in sound financial shape, and that the loss was an isolated incident.
"Our fortress balance sheet remains intact."
Much of the hearing focused on whether bank executives and financial regulators can spot risks before they grow to the point of damaging a bank or the banking system.
Senators asked Mr Dimon whether he believed new trading restrictions - the so-called Volcker rule - would have prevented the losses.
Mr Dimon, who has been publicly critical of the Volcker rule in the past, replied: "I don't know what the Volcker rule is. It hasn't been written yet."
When pressed further on whether the Volcker rule could have avoided this situation, he said: "It's possible. I just don't know."
The Volcker rule aims to limit a bank's trading activity in order to prevent the need for any further government bailouts.