Elizabeth Warren: JPMorgan CEO should resign from NY Fed, self-regulation ‘wrong and dangerous’

July 31, 2016

By Jennifer Mattson

Massachusetts Senate candidate Elizabeth Warren said Monday JPMorgan Chase's recent disclosure that it lost more than $2 billion in trading is just another sign that banks cannot regulate themselves.

Appearing on CBS This Morning, Warren called again for CEO Jamie Dimon to step down from the board of directors at the New York Federal Reserve Bank, which oversees the country's largest banks.

"Right now… he is advising the New York Fed about the appropriate oversight of banks like his bank," she said. His resignation would be a public acknowledgement that he is in a position of trust, Warren argued.

She said we need government oversight because these financial institutions "run the risk of taking down everyone's job… pension… and the entire economy."

On NBC's Meet the Press, Dimon said he was "dead wrong" to dismiss concerns about the bank's trading practices, adding "we told you something that was completely wrong a mere four weeks ago."

Dimon has been one of the most vocal opponents of the Volcker Rule aimed at preventing risky trades.

Others have also come out against Dimon in recent days.

Hedge fund manager James Rickards, wrote in U.S. News and World Report, that Wall Street CEOs like Dimon argue against regulation claiming that what they do is so complex, that the public must trust them but "no claim to superior knowledge could be further from the truth."

He said Dimon "would have the public believe that the loss was due to a complex hedging strategy" but it was actually a very simple trade and that if "he had an ounce of decency, he would resign now."

On Monday, Ina Drew, JPMorgan Chase CIO, who oversaw the trades, announced her retirement, according to the New York Times. She will be will succeeded by Matthew E. Zames, a co-head of JPMorgan’s global fixed income group and head of capital markets in its mortgage division.