JP Morgan Boss Faces Grilling Over £1.2bn Loss
The man whose bank lost at least $2bn is being hauled before American lawmakers to explain the blunder.
JP Morgan Chase chief executive Jamie Dimon is to be grilled by the Senate Banking Committee after the loss, amid revelations the amount could be far more than originally thought.
His appearance follows an intense damage control campaign by the bank and its Wall Street allies, who fear the loss will lead to greater regulation of the banking sector.
JP Morgan claims the multi-billion dollar debacle was caused by a hedge that went wrong. Hedges are banking bets made to offset potential losses.
But critics say it was a speculative bet dressed up as a hedge.
The original loss of $2bn (£1.2bn) has been increased by market movements to as much as $8bn (£5bn).
Bankers have been leaping to Mr Dimon's defence in the run up to the hearing, saying it was unnecessary to call him to Washington.
Others will disagree. There is profound resentment in America at the perception the country's banks have been bailed out with public money but not mended their ways.
In the wake of the 2008 financial crisis the banking industry effectively saw off efforts to impose regulations and reform partly through a massive lobbying effort in Washington DC.
There is also scepticism about the chances of the banking committee submitting Mr Dimon to effective scrutiny given the support his bank has given committee members in the past.
The Centre for Responsive Politics, which analyses campaign funding, claims the Senate Banking Committee's chairman Tim Johnson's second-largest contributor over two decades has been JP Morgan.
The same can be said, it claims, for its top Republican senator, Richard Shelby.
At least four other committee members can also list the bank among their largest campaign contributors.