Live Video of Senate Panel on JPMorgan's Trading Loss
Live video of Friday's hearing is available from the Senate's Web site or from C-Span 3
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Levin Takes Aim at Derivatives Trading
Gary Cameron/ReutersFrom left, Senators Ron Johnson, John McCain and Carl Levin, conduct a hearing on JPMorgan's trading loss. Friday's hearing is the first public appearance for Ina Drew after the top...
View ArticleHow a Sleepy Operation Grew into a Profit Center
Mr. Levin cites a "massive portfolio riddled with risk," a "runaway train of derivatives trading" and regulators who failed to act. Together, he says, these facts resemble what happened in the...
View ArticleLevin Calls Out JPMorgan's Absent Chief Executive
Mr. Levin faults the bank's traders for what he says are deliberate attempts to play down and disguise the losses on the trades. In the scathing report issued by the Senate subcommittee on Thursday,...
View ArticleToo Little Transparency at JPMorgan
JPMorgan, Mr. Levin claims, "dodged" regulatory oversight. Mr. Levin says that JPMorgan was "too busy betting on derivatives to issue the loans needed to speed economic recovery." Compared with its...
View ArticleMcCain Takes Aim at Regulators
"These trades were not conducted by a group of rogue traders," Mr. McCain says. He then continues to detail how the problems that led to the disastrous trades extended beyond the traders making the...
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Drew Says Her Resignation Decision Was 'Devastating'
Gary Cameron/ReutersIna Drew, who headed JPMorgan's chief investment office, at a Senate hearing on the bank's trading loss. Ina Drew begins testifying. She starts by outlining her 30-year career at...
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Bank's Chief Risk Offer Explains His Role
Gary Cameron/ReutersAshley Bacon, JPMorgan's acting chief risk officer, at Senate panel on the bank's trading loss. After Ms. Drew, Ashley Bacon, the acting chief risk officer of JPMorgan, begins his...
View ArticleThe Importance of Being Too Big to Fail
Two Republican members of the Senate subcommittee, Mr. McCain and Senator Ron Johnson of Wisconsin, argue that JPMorgan's high-handed and dismissive attitude toward regulators highlight a troubling...
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The Questioning Begins
Gary Cameron/ReutersIna Drew, left, Peter Weiland and Ashley Bacon swear in before testifying at a Senate inquiry on JPMorgan's trading loss. Mr. Levin leads off the questioning, asking Ms. Drew about...
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"Who Was in Charge of Sending Them?"
Gary Cameron/ReutersPeter Weiland was in charge of risk management for JPMorgan's chief investment office, the unit at the center of flawed trade. Mr. Levin focuses on why JPMorgan did not send...
View ArticleReturning to 'Too Big to Fail'
Mr. Johnson, who was elected to the Senate as a politician associated with the Tea Party, spends his limited time at the hearing focusing on the issue of 'too big to fail.' He asks Mr. Bacon whether...
View ArticleRisk Officer on Risk Metric
Peter Weiland, once a senior risk officer in the investment office, in March 2012 trashed in an e-mail a crucial risk reading that raised red flags about the investment office’s trades. Mr. Levin asks...
View ArticleThe Mystery of the Growing Assets
The line of questioning switches to Mr. McCain, who spends time asking how the chief investment office's assets ended up growing, not shrinking as JPMorgan had indicated to the comptroller's office....
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A Jump in Breaches
Gary Cameron/ReutersA Senate subcommittee questioned bank executives and regulators at a hearing on JPMorgan's trading loss. Mr. Levin focuses on a series of risk-limit breaches at JPMorgan over...
View ArticleOutdated Risk Limits
Mr. Levin turns his attention to JPMorgan's outdated risk limits, which hadn't been updated since 2009. [Mr. Weiland concedes the matter.] The senator notes that the comptroller's rules require that...
View ArticleFlaws in Creating the New Risk Model
One of the big problems for Mr. Levin was that when JPMorgan finally updated its risk limit model -- known in banking as "value at risk," or VaR -- the new system was deeply flawed. There was little...
View ArticleValue-at-Risk Changes
The witnesses are asked about the January 2012 value-at-risk model change. This crucial switch effectively allowed the investment office to keep making its huge bets. Mr. Levin asks Mr. Bacon what his...
View ArticleJPMorgan's Former Finance Chief in the Hot Seat
After a brief break, the hearing returns with Mike Cavanagh, a co-head of JPMorgan's investment bank, and Douglas Braunstein, the chief financial officer at the time of the trades. Mr. Braunstein took...
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A Dispute Over a Report to Regulators
Gary Cameron/ReutersIna Drew, JPMorgan's former chief investment officer, confers with an aide before testifying at a Senate hearing. Mr. Levin becomes fired up over an exchange with Ms. Drew over the...
View ArticleRevisiting That Fateful Analyst Call
Mr. McCain brings up the infamous call that JPMorgan executives held with analysts in mid-April last year, during which Mr. Braunstein said that he was "very comfortable" with the size of the chief...
View ArticleDimon Withheld Data From Regulator
Jamie Dimon temporarily withheld crucial data from the Office of the Comptroller of the Currency, a bank regulator, as the bank’s trading problems grew. Douglas Braunstein, then chief financial...
View ArticleLevin Challenges Braunstein
Mr. Levin challenges Mr. Braunstein, just as he pushed back against Ms. Drew. He wants to know why the losses provided by Mr. Braunstein to examiners at the comptroller's office failed to capture the...
View ArticleLevin on How Traders Hid Their Losses
After peppering the executives with questions about why the bank continued to keep regulators in the dark, Mr. Levin embarks on a discussion about how traders in the chief investment office disguised...
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'How Do You Possibly Justify Your Process?'
Gary Cameron/ReutersSenator Carl Levin questions bank executives on JPMorgan's trading loss. Mr. Levin says that for the bank, the understatement of traders' losses helped reduce the red ink on the...
View ArticleLevin Continues to Push Bank Executives
Continuing to push on the valuation of the trades, Mr. Levin refers to a recorded conversation between Ms. Drew and Javier Martin-Artajo. In that conversation that occurred in April 2012, Ms. Drew, the...
View ArticleWhy Were Investors Left Unaware?
Through pounding executives, for now, about the valuation of the trades, Mr. Levin turns to the statements made to investors during an April 13 earnings call. Mr. Levin points to an e-mail that Mr....
View Article'Calming the Seas'
In a hearing full of testy exchanges, the dialogue between Mr. Levin and Mr. Braunstein is shaping up to be the toughest so far. Mr. Braunstein reiterates that the statements he made on April 13...
View Article'You Think That's a Balanced Presentation?'
Mr. Levin continues to hammer away at what one of the crucial elements of the "whale" saga: what Mr. Braunstein said during the April 13 call. His line of questioning turns to what should have been...
View ArticleBehind JPMorgan's Big Credit Bet
Mr. Levin is alleging there were many inaccuracies in Douglas Brainstein's explanation of the big credit bets on an April 13th, 2012, public conference call. Here's the part of the call he is focusing...
View ArticleA Better Way to Calculate Bank Risk
Mr. Levin asks a question of Michael Cavanagh that has deep relevance today as banks move into the Basel III regulatory regime, which makes heavy use of models to calculate risk-weighted assets (and...
View ArticleQuestions About E-Mail
Mr. Levin engages Mr. Weiland, the former chief risk officer for the C.I.O. unit, about e-mails that a JPMorgan employee who helped craft the new risk models had sent. Mr. Weiland says that the...
View ArticleJPMorgan Executives Are Excused
Nearly four hours after the hearing began, the JPMorgan executives are excused from the hearing. Mr. Levin thanks them for coming without needing a subpoena. His parting words still suggest troubles...
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