Testimony on “Examining Bank Supervision and Risk Management
in Light of JPMorgan Chase’s Trading Loss”
by
Chairman Mary L. Schapiro
U.S. Securities and Exchange Commission
Before the
Committee on Financial Services
United States House of Representatives
Tuesday, June 19, 2012
Chairman Bachus, Ranking Member Frank, and members of the Committee: I appreciate the opportunity to testify on behalf of the Securities and Exchange Commission regarding the significant trading losses announced last month by JPMorgan Chase.
JPMorgan Chase & Co. (JPMC) is a bank holding company with $2.3 trillion in consolidated assets. The Federal Reserve Bank of New York is JPMC’s regulator. JPMC has a number of affiliates, including several bank subsidiaries. The largest such subsidiary, JPMorgan Chase Bank, N.A. (Chase) is a national bank supervised by the Office of the Comptroller of the Currency (OCC). Additionally, JPMC’s material broker-dealer subsidiary registered in the United States is JP Morgan Securities LLC, which is subject to oversight by the U.S. Securities and Exchange Commission (SEC), including compliance with its financial responsibility and customer protection rules.
On May 10, 2012, the company announced that JPMC incurred $2 billion in trading losses stemming from activities conducted by JPMC’s Chief Investment Office (CIO). JPMC’s Chairman and CEO, James Dimon, publicly stated that the company could face additional losses due to market volatility. The CIO is functionally responsible for the bank’s asset-liability management activities.
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