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Jamie Dimon House Testimony: Round 2
June 18, 2012
[ by Howard Haykin ]
'Second Verse, Same as the First.' (Lyrics from "Henry the Eighth", 1965, Herman's Hermits)
JPMorgan Chase Chairman and CEO Jamie Dimon, who appears on Tuesday before the House Financial Services Committee, seems to have adopted the famous refrain from the above song - that's because Mr. Dimon plans to stick to last week's testimony script prepared for the Senate committee, almost verbatim.
So, if there's anyone out there hoping Mr. Dimon, during Round Two, will reveal the full story behind his bank’s multibillion-dollar trading loss - or any fresh details for that matter - they are in for a disappointment. Maybe they'll finally take Mr. Dimon at his word when he says he won't release any substantive information on the matter until the bank reports its Q2 results this summer.
Text of Dimon's Prepared Testimony. The prepared remarks for the House panel, released Monday morning, tracks nearly word for word with his remarks prepared for the earlier Senate Banking Committee hearing. There are, however, a few trivial changes scattered in the 4-page testimony. In highlighting the bank’s "fortress balance sheet," Mr. Dimon clarifies that the bank has "well over $30 billion in reserves," without specifying that the money was "loan loss" reserves, as he did last week. It is unclear why the bank abandoned the earlier wording.
In the House committee version, Mr. Dimon also tempered an earlier boast that, as "one of the largest small business lenders," the bank’s lending to small businesses jumped 70%. It turns out, the actual jump was 52%. The tweaked House testimony clarifies the earlier proclamation.
The prepared testimony will take a back seat on Tuesday to Mr. Dimon’s live banter with lawmakers. He is expected to face questions about his oversight of the trades gone awry — and scrutiny for his opposition to new financial rules, some of which may make the bank’s risky trading illegal.
The House committee will also hear from the bank’s regulators - including the Federal Reserve and the Office of the Comptroller of the Currency. Both are under fire for not catching the bank’s risky trading before it caused the roughly $3 billion dollar blow up.
Dimon's Free Pass By Senate Panel. How Might House Panel Differ? Tuesday's hearing is the last of several Congressional panels on the bank’s trading losses, which are tied to complex bets on credit derivatives. At the Senate hearing last week, Mr. Dimon received a free pass from many lawmakers, who seemed more interested in hearing his suggestions for fixing the economy rather than the details of his own bank’s missteps.
The House panel, which includes some 70 members, has a feistier flare than the Senate panel. The regulators in particular are expected to face stricter scrutiny. Nevertheless, Dimon is expected to continue playing down the broader significance of the trading blunder, calling it "an isolated event."
"We will not make light of these losses, but they should be put into perspective," he said in the prepared remarks. "We will lose some of our shareholders’ money – and for that, we feel terrible – but no client, customer or taxpayer money was impacted by this incident."
[Dealbook, 6/18/12]

