Obama 'Praises' JPMorgan Chief Behind $2bn Loss
The boss of America's biggest bank, JP Morgan Chase, has been described as "one of the smartest we got" by President Obama, as it reels from a massive $2bn (£1.2bn) trading loss.
The American leader was giving his reaction to the news that JPMorgan - led by chief executive Jamie Dimon - had lost money in a series of bets in financial markets.
The positions, which had been defended by Mr Dimon only one month ago, were designed to protect the bank from risk by hedging against its other investments.
The spectacular failure, partly linked to a trader in London, are now the subject of an investigation.
On ABC television's The View programme, Mr Obama said: "JPMorgan is one of the best managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost $2bn and counting.
"We don't know all the details. It's going to be investigated, but this is why we passed Wall Street reform."
According to the transcript, he continued: "The whole point was, even if you're smart, you can make mistakes and since these banks are insured, backed up by taxpayers, we don't want you taking risks where eventually we might end up having to bail you out again, because we've done that, been there, didn't like it.
"This is the best, or one of the best-managed banks. You could have a bank that isn't as strong, isn't as profitable making those same bets and we (the government) might have had to step in, and that's exactly why Wall Street reform's so important."
He spoke hours before Mr Dimon faced shareholders for the first time since the losses were revealed. JPMorgan Chase's annual meeting was held in Tampa, Florida.
At the meeting shareholders rejected a proposal calling on the company to split the roles of chairman and chief executive, a victory for Mr Dimon.
Major pension funds in New York, California and Florida, as well as the two leading proxy advisory firms, had backed the idea of splitting the roles.
Mr Dimon prepared for a barrage of questions about what he knew and when he knew it over the derivatives' loss.
According to Bloomberg, Mr Dimon is considering reviewing some bonus payments to senior staff which could go some way to placating talk of shareholder revolt.
But the central question for investors is how could a bank that has boasted of its "fortress" balance sheet make such a major mistake?