UPDATE 1-JPMorgan trading loss shows danger in bank size -Volcker
* Volcker says JPM loss may show banks too big to manage
* JPMorgan announced massive trading loss last month
* Volcker has advocated for reducing risks in banks
NEW YORK, June 7 (Reuters) - Former Federal Reserve Chairman Paul Volcker said JPMorgan Chase's recent multibillion-dollar trading loss may show that the nation's largest banks are too big to manage.
JPMorgan revealed last month that its London office had executed a failed hedging strategy that has so far produced at least $2 billion in trading losses.
The news has rattled Wall Street and Washington and raised questions about whether banks are still taking too many risks following the 2007-2009 financial crisis.
"Maybe this JPMorgan thing is an illustration that these(banks) are really too big to manage," Volcker said on Thursday at an American Bar Association event at Columbia University in New York. "There are so many things going on at these banks."
The Volcker rule, named for Volcker - who has advocated for banks to become less complex and interconnected - would ban banks from making speculative bets with their own funds if they enjoy federal guarantees.
He said on Thursday that the failed trading strategy at JPMorgan's Chief Investment Office is "the antithesis of the kind of ethic and approach we want to take in banking."
JPMorgan Chief Executive Jamie Dimon is expected to testify next week before Congress about the trading losses, which were first disclosed by the bank on May 10.
- Tweet this
- Share this
- Digg this
- Malaysian plane still missing; questions over false IDs
- Australia's Wesfarmers plans A$1.12 billion insurance spinoff - report
- UPDATE 6-Libya threatens to bomb N.Korean tanker if it ships oil from rebel port
- Michigan woman dead for six years found only after money runs out
- Global diets get more similar in threat to food security-study