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Liveblog: Jamie Dimon Appears Before Senate Banking Committee

Jamie Dimon testifies before Senate Banking Committee on "Whale" Trades

The Senate Banking Committee hearing with Jamie Dimon of JPMorgan Chase is scheduled to begin at this hour. A preview of today’s proceedings, including Jamie Dimon’s written testimony, is available here. You can watch the hearing on C-SPAN.

I’ll add my comments below.

…well, the hearing started with a bang. Foreclosure activists screamed at Jamie Dimon in the hearing room, chanting “Stop foreclosures now.” One man, and it sounded like Bruce Marks of NACA, yelled at Dimon, “You’re a homewrecker.” They were removed from the room. Senate Banking Committee Chair Tim Johnson has opened his remarks.

Suzy Khimm says that the protesters were from Code Pink and Occupy DC.

…Johnson notes that this is the 2-month anniversary of Dimon’s “tempest in a teapot” comments, before he admitted the Fail Whale trade losses.

…Richard Shelby’s statement starts by saying that the committee shouldn’t second-guess private businesses, but because of the guaranteed deposits, the committee must act to ensure taxpayer dollars aren’t at risk. But generally he’s questioning the need for the hearing, and highlighting regulator error rather than nailing JPM.

CommunityThe Bullpen

Liveblog: Jamie Dimon Appears Before Senate Banking Committee

The Senate Banking Committee hearing with Jamie Dimon of JPMorgan Chase is scheduled to begin at this hour. A preview of today’s proceedings, including Jamie Dimon’s written testimony, is available here. You can watch the hearing on C-Span.

I’ll add my comments below.

…well, the hearing started with a bang. Foreclosure activists screamed at Jamie Dimon in the hearing room, chanting “Stop foreclosures now.” One man, and it sounded like Bruce Marks of NACA, yelled at Dimon, “You’re a homewrecker.” They were removed from the room. Senate Banking Committee Chair Tim Johnson has opened his remarks.

Suzy Khimm says that the protesters were from Code Pink and Occupy DC.

…Johnson notes that this is the 2-month anniversary of Dimon’s “tempest in a teapot” comments, before he admitted the Fail Whale trade losses.

…Richard Shelby’s statement starts by saying that the committee shouldn’t second-guess private businesses, but because of the guaranteed deposits, the committee must act to ensure taxpayer dollars aren’t at risk. But generally he’s questioning the need for the hearing, and highlighting regulator error rather than nailing JPM.

…Shelby says strong capital requirements are the answer to missteps by banks. Though he adds that risk management should be on the menu as well (blames FDIC, Fed and OCC for that).

…Shelby mentions the FAIL of JPMorgan’s risk committee on the board of directors, which included such technical experts as a woman who runs a museum in New York City.

…Shelby wants testimony from Fannie and Freddie. Expect a lot of “b-but the GSEs” from Republicans today.

…No opening statements from anyone but Johnson and Shelby today. And Mark Warner’s at his daughter’s graduation, so no Warner. Dimon’s up for his opening statement.

…You can follow along with Jamie Dimon’s opening statement at the link. When talking about how executives failed to monitor risks, he ad-libbed “and I include myself in that.”

…Think Progress has video of the Dimon protests that opened the hearing.

…As I said this morning, Dimon’s balance sheet “remains intact” because they sold tens of billions of securities and stopped a share buyback after the Fail Whale trades.

…Johnson begins the questions, five minutes for each member. Johnson: What did you know when you said “tempest in a teapot,” a month before announcing the losses?

Dimon answered: “I was dead wrong.” He said he was told it was an isolated issue, didn’t look this it would get that bad.

…Johnson: Did you remove triggers from a risk limit from CIO? Dimon: Unaware. Dimon’s dancing.

…Johnson: Why was the risk model changed? Did it mask the true risks of the trading activity? Dimon: Sometime in 2011, CIO asked to update models to be compliant with new Basel rules. They put in a new model in January 2012. Models are changed all the time. Approved by the model review group. It did increase the amount of risk. We were unaware in April that the model contributed to the problem. We eventually went back to the old model.

…Johnson: Did you make decision to exempt CIO of risk control review outside the unit? Dimon: CIO unit did so well for so long, there was complacency and overconfidence. It had its own risk committee, but it wasn’t independent-minded enough. Should have challenged this portfolio. Should have always had more scrutiny and different limits from start.

…Johnson: Did pay structure at CIO incentivize risky behavior? Bonuses for generating profits? Will you seek clawbacks? Dimon: We have not had special severance packages or parachutes. CIO paid on a formula. Couldn’t invest long, take high-yield exposure. We look at performance when we pay people, that includes integrity, recruiting, etc. I don’t believe the compensation made this problem worse. When the board finishes the review, you can expect we’ll take proper corrective action. Likely to be clawbacks.

…Shelby’s up. Explain more what really happened. Dimon: Biggest risk is loans, with excess deposits, we have a portfolio, that’s most of CIO, it’s conservatively managed (!).

….Shelby: explain what you were doing in these specific trades. Dimon: Index swaps, derivatives, credit-related. Shelby: Took a position? Dimon: Should have made a little money in a benign situation, but during a crisis, it would make more money. Did work in 09 and 10. Shelby: Is this a hedge? Dimon: Yes, of our whole portfolio. Then we wanted to reduce risk, but we took on far more trades.

…Shelby: Do you want a closed hearing? Prefer not to divulge? Dimon: In July we will make more disclosures about portfolio and how to reduce risk.

…Shelby: Hedging or proprietary trading? Hedging risk or earning a profit? $4B of net income in 3 years, 10% of profits? Dimon: The whole CIO unit invests money and earns income. Supposed to earn revenue. This credit portfolio designed to earn a lot of revenue in a crisis. I consider that a hedge.

…Shelby: So what went wrong was the way the hedge was contrived? Dimon: The way it was contrived in January, February and March. Something I cannot defend.

…Shelby: What did you learn? Dimon: Never get complacent in risk. You need granular limits in risk, including things like liquidity risk. In rest of the company, we have those disciplines in place. Not here.

…Schumer: Question about risk committees. I wanted separate risk committee included at least one risk management expert on board of all big firms. You had a risk committee. What went wrong with it? What do you suggest to regulators? Dimon: Risk committee does a lot of work. A little unrealistic to have the risk committee capture something like this. They took the company through biggest financial crisis of all time with flying colors.

…Schumer: You feel this was too small an item for the risk committee? Dimon: Risk committee reviews a lot of issues, I just think it would be hard for them to capture it if management didn’t capture it.

….Schumer: Broader context. What’s to stop this from happening again, particularly at a weaker institution, smaller than JPM? Dimon: Regulators can promulgate best practices everywhere. Banks better capitalized now, risk committees more engaged, no off-balance sheet vehicles. Schumer: What about non-banks? Dimon: Regulators working on it.

…Schumer: Glad to hear there is a clawback policy. Appropriate. Tell us about the policy you have. Dimon: For senior people, we can claw back even for things like bad judgment. Pretty extensive. In favor of the clawback system. Board will review.

…Schumer: Ever use the clawback policy? Dimon: Not thus far.

…Crapo: Want to not have regulators running private-sector institutions. OCC said 65 examiners on-site at JPM. Dimon: Yes. Crapo: What should functions of regulators be? (unbiased source!) Dimon: I think there have been improvements in companies because of regulators’ criticism. I don’t think they can realistically stop something like this from happening. They can do capital and liquidity standards, proper disclosures and governance. You will accomplish some of those things with new regulations.

….Crapo: Assumed JPM could deal with $80B losses and still be well-capitalized, per stress tests. Dimon: We’d be well-capitalized, but I wouldn’t be here. We believe in stress tests. We stress hundreds of scenarios to make sure we have adequate capital and liquidity.

….Crapo: Tier One capital is $128B? Dimon: Yes.

…Crapo: Volcker rule. Some said no distinction between prop trading and hedging. Agree? Dimon: I think it’s going to be very hard to make a bright-line distinction between prop trading and hedging. Do understand the intent of the Volcker rule. I think the devil is in the details that allows the good of capital markets and not the bad.

…Crapo: What is a proper hedge? Dimon: Portfolio hedging, I think should be allowed, to protect the company in bad outcomes. There are ways and methods and analytics for that. Like going short credit if you think there might be a credit crisis.

…Jack Reed: Impt hearing. Go right to ability of large financial institutions to manage risk. Strong case for clear but strong Volcker rule, and for standing up a director at the Office of Financial Research. Question about risk management. Was your risk officer managing CIO? Dimon: Every business we have had a risk committee. Those managers report to the head of risk in the company. That chain of command didn’t work in this case. You can blame it on anyone in that chain. There’s an independent model review group. We change models all the time. Models are backward-looking, the future isn’t the past. They’re never totally accurate. We don’t run the business on models, they’re one input.

…Reed: Did OCC inquire about the change in modeling? This was just CIO? Dimon: This was just in CIO. Reed: Why didn’t you change firm wide? Dimon: We have hundreds of models. Reed: Did OCC inquire? Dimon: I don’t know.

…Reed: Seems VaR model was loosened up considerably? Dimon: In January, new model allowed them to take more risk. We don’t believe it was done for nefarious purposes. Flawed. So we went back to the old model.

…Reed: Appears CDS made to protect outstanding loans in Europe in 07-08. Classic hedging. You extended credit, insuring other side. But in 11-12, the bet was switched, you started taking the other side, selling credit protection. Seems a directional bet unrelated to your credit exposure in Europe. Looks like prop trading designed to generate profit. How can you be on both sides of transaction and claim that you’re hedging? Dimon: Original intent good, what it morphed into I will not defend. Violates common sense in my opinion.

…Reed: How do we build in rules that prevent well-intentioned people from doing detrimental things. You’ve lost several billion in deposits and market value to shareholders. With a good Volcker rule they would not have been able to do this IMO. Dimon: Volcker rule not written yet, may have stopped parts of what this portfolio morphed into. Possible, I don’t know.

…Corker: Biggest risk is making loans, right? Dimon: Yes. Corker: What would happen if you didn’t have ability to hedge risk of loans in a way that made sense? Dimon: You might have to make less loans, so if things got bad, you would handle it. We want to be able to survive bad events. Need to protect ourselves to serve our clients.

…Corker: Really no way for a regulator to catch activity like this? Dimon: I think it would be hard to do. Unrealistic to capture this.

…Corker: Banker’s always going to be ahead of a regulator, you’re giving them the information to regulate… One of your peers in saying that Dodd-Frank missed the mark. Should have looked at regulating the market themselves, not the regulated entities. Has Dodd-Frank made system safer? Dimon: We supported some of it. Parts of it in conjunction with higher capital and liquidity, system is safer today. Corker: But has Dodd-Frank made system safer? Dimon: I don’t know.

…Corker: Hoenig model, Bair model, Glass-Steagall. What’s the societal good from a highly complex institution, and what system would be like without them? Second, you missed this, but are institutions too complex to manage? 16 of top 20 have had financial injections. Dimon: We have a complex system. A place for large companies and small companies. We bank largest multinationals, in 40 different countries. We’re everywhere, basically. We are the largest banker to banks. Extend $23B in credit to smaller banks. We can’t do everything community banks do. Some negatives to size. Our diversification was a strength in the crisis. Greed, arrogance, hubris also part of size. But if you do a good job, you win people’s business. People buy our services because they need them.

…Corker: If you weren’t doing it, someone else would. If you were sitting on this side, what would you do to make our system safer? Dimon: We never sat down, both parties, and had detailed conversations about what went wrong, what needs to be fixed. Still haven’t fixed the mortgage markets.

…Menendez: “Hedge or not a hedge, that’s the real question.” Hedge doesn’t create a loss without a corresponding gain, that’s why you’re hedging. But you were selling a toxic instrument in CDS. When you hedge a hedge, isn’t that gambling? Dimon: I don’t believe so, no. Menendez: So what did this morph into? Dimon: Something too risky for my company. Menendez: If too risky for your company, what’s to stop it from losing $50 billion and taking into the possibility of a run and becomes a taxpayer issue. Glad to hear that we should “take comfort” in capital reserves. Do you regret efforts to get banks to hold more money “un-American”? You railed against us when we were trying to pursue greater capitalization. Dimon: I don’t think what you said is true. We supported greater capital and liquidity. We did not fight everything. I was talking about things being skewed against American banks between Dodd-Frank and capital. Menendez: You said requirement to have banks hold more money is un-American. Dimon: I did not. Menendez: You might want to look at that.

…Menendez: Fortress balance sheet has a moat dug by taxpayers. Billions in bailout money and loans by the Fed. American people a big part of making your bank healthy. Want to make sure you’re not working against legitimate efforts to control the risk, so it’s not collective risk of taxpayers. Dimon: I want strong financial system like you. I support a lot. Some regulations we think don’t make sense. We’re entitled to tell you. Menendez: American people entitled to make sure they don’t have to reach into their pockets again.

…DeMint: We lose twice as much as your $2 billion every day and plan to continue. If we had a clawback, none of us would get paid. (Grandstand) Follow up on Corker. A lot of us are frustrated bank managers and want to manage your business. What do we need to take apart that we’ve done to make the system work better, and not put taxpayers at risk. Dimon: I believe in strong regulations, not always more. We don’t actually know who has jurisdiction over what we do anymore. I prefer a simple, clean, strong regulatory system. This is too complex. Not clear to me who has responsibility or the authority.

…DeMint: Do you share with peers on things? Dimon: We used to do a lot more. Constantly talking to regulators. Less collaboration among banks and regulators than there used to be. Become more adversarial.

…DeMint: Please come back next year and tell me how things are going (gag).

…Sherrod Brown: You have 19,000 employees in Columbus area. I don’t want to see consumer lenders in Columbus lose jobs because cowboys in London make bad bets. Did you personally approve of CIO trading strategy? Dimon: No, aware of it, not approve. Brown: Did you monitor the CIO? Dimon: Yes.

…Brown: Asked OCC, they said 5 examiners in London. Portfolio of assets in question $200B. They said trades “transparent to regulators.” But said examiners unaware of risk until April. Was OCC told before April 6? Dimon: We try to be “open-kimono” with regulators. We were misinformed, we had them misinformed. The second we found out, we told the regulators.

…Brown: April 13, earnings call, was OCC told of trades? Dimon: I don’t know. Probably continued to misinform. When we found out, we called board and regulators, probably not in that order. Brown: Did OCC inquire about trades? Dimon: I don’t know. Brown: When did OCC challenge the trades? Dimon: When they understood significance, they challenged it every day. Brown: 5 regulators in London enough? Dimon: Don’t know, but physical location not that important.

…Brown: CIO has $370B. Should OCC been more focused on synthetic derivatives? Dimon: I think we should have. If they stopped us would have been happy. Brown: If you had less than $2.3T, would you need a CIO? Dimon: We bought WaMu, that put a lot of cash through the door. Adds to lending. Brown: Corker said JPM may be too complex to manage. JPM quadrupled in size in 13 years. $2.3T in assets. Grown $400B in last 5 years. Neither you or OCC could monitor what was happening. CIO would have been eighth-largest bank in US. Appears executives and regulators can’t understand what’s happening in all these offices at once. Too big to manage and too big to regulate.

…Johanns: This was a dumb move, you apologized for that. How many regulators on site from some federal entity? Dimon: Hundreds across multiple regulators. Johanns: Are the channels clear? Dimon: We have to deal with system, however it is. Johanns: Have regulatory costs increased after Dodd-Frank? Dimon: Rough estimate, about $1 billion a year across system. Johanns: Economically better to do business elsewhere than US if we make life so complicated with Dodd-Frank? Will firms leave? Dimon: We’re going to be fine ourselves. I hear a lot of people saying it’s easier to be overseas. Johanns: Dodd-Frank had laudable purpose, then farmer’s co-ops saying to me “what are you doing?” Someone told me last night that there had not been a single bank charter last year, first time in 78 years. Dimon: Unaware of that.

…Johanns: Our medium and small banks navigating through maze of Dodd-Frank. Dimon: sometimes harder for medium and small banks.

…Tester: Focusing on JPM’s role before MFGlobal’s bankruptcy. MFGlobal shuffled millions around in a shell game. Customers saw their funds wiped away. We have new information on the investigation last week. Need to ensure customers see funds returned. Accounts raided to cover firm’s losses. JPM returned $168M in cash during MFGlobal’s liquidation. Why did it take your firm 7 months to return funds? Dimon: When MFGlobal had problems, we immediately went to trustees and courts. We cooperated every step of the way. Tester: $168M held 7 months. Why? Dimon: We were waiting for the guidance of the court and the trustee. Tester: You have potential litigation on this. JPM had significant concerns on the health of MFGlobal, worried that collateral paid with segregated funds. You placed MFGlobal on debit alert. MFGlobal did not sign confirmation letter your firm demanded. But JPM transferred the funds and accepted the collateral anyway. Were you aware of this? Dimon: Not at the time. Tester: Why did you allow the transfer? Dimon: I think transfer had been made, and we did a follow-up letter. Not required. Tester: You had no conversation about segregated funds with MFGlobal? Dimon: They transferred it to us. Tester: You were concerned about MFGlobal. You put them on debit alert. They requested money to transfer, some question by snr management in your firm, did JPM have obligation to protect? Dimon: They gave oral confirmation and then went bankrupt. Tester: Is that standard procedure? Dimon: Standard procedure is not to say anything at all. Tester: Just looking out for my folks. Dimon: I understand.

…Jerry Moran: How do you manage JPM and manage hubris, arrogance, etc? Dimon: We try to have good people, this happens in small companies too. Moran: You don’t mean the Senate? Dimon: Not now. We believe the job is to serve clients. And we do it around the world. We ask them to treat people right. And we try to acknowledge legitimate complaints and fix them.

…Moran: Want to make sure taxpayers aren’t responsible. We set up a living will. Tell me about JPM’s living will. Dimon: We have to get rid of anything that looks like too big to fail. We shouldn’t prop them up. You want to be sure they can fail and not damage the country. I think we should call it bankruptcy, not resolution. I’d fire the management, I’d fire the board. Resolution authority starts to put the structure in place. Give it to the regulators who know to do it. FDIC took down WaMu. We filed recently an analysis and report of how to take down JPM. I think the bank should be dismantled after that and the name should be buried in disgrace. Today, JPM will pay FDIC $5 billion. Puts incentive on big banks to collaborate, so big banks aren’t taken down by each other.

…Moran: If JPM became a big dumb bank, can we do it with no problems to the taxpayer? Dimon: Yes.

…Kohl: Your lending not keeping pace with deposits. You have most deposits in US. Other banks have loan-to-deposit ratios that are 10-20% higher than your banks. Why? Prioritizing risky trading over lending? Dimon: Making all the good loans we can. We are a global money center bank. We have several hundred billion right now invested in case biggest companies call up for their money. We need huge liquidity. Kohl: But your loan-to-deposit ratios are lower. Not square with your statements. Dimon: Our middle market up 12%. Small biz loans up 52%. Huge number of new mortgages. But we need to keep a lot of cash around. Kohl: But biggest banks are generally described in same way. Their loan-to-deposit ratios are higher. Dimon: Everything’s different.

…Kohl: Constituents call me about modification troubles. Often say the banks lose their paperwork. One said “I don’t want to lose my house because they can’t get their paperwork straight.” Dimon: I’ll follow up on that right away. We’re working on it. We’re doing modifications better and faster today. We were overwhelmed at the beginning. “We don’t want you to lose your home because of our paperwork problem.” Kohl presses. Dimon: If there’s a problem, we will take care of it right away.

…Wicker: Asking about CIO. You said you don’t know what Volcker rule is. As currently drafted, how would it have affected CIO hedging in 2008. Dimon: I think you’re allowed to portfolio hedge in 2008. Imp part of Volcker rule isn’t portfolio hedging, it’s to make markets. Capital markets part of great American economic business engine. Don’t want to throw out baby with bathwater. Cost of buying stock, interest rate swap, 1/10 of what it was 10 years ago. Everyone doing things cheaper is a good thing. Volcker rule has so many piece, don’t think of it as binary, think of it like traffic laws. Would be a shame to shed capital markets out of “anger.”

…Wicker: You said system is safer today, but not from Dodd-Frank. You said regulatory regime more complex and don’t know where jurisdiction is. Dimon: Some of Dodd-Frank made it safer, but markets got rid of some of the worst stuff. Wicker: Nobody got all parties in a room and talked about what needed to be fixed. Did you volunteer? Dimon: We said we’d do whatever you want. We’d get apartments down here. But it would have been better with more collaboration. Wicker: On living will, JPM has one, been approved? Dimon: No, drafted and circulated.

…Merkley: In 2008 and 2009, JPM benefited from $500B in federal loans, $29B in TARP loans, untold billions from AIG. Would JPM have gone down without federal intervention? Dimon: I think you were misinformed. We were asked to take TARP money by Paulson, Geithner and Bernanke. We were asked to. We did not borrow from Fed unless asked to. Merkley: We would all like to be asked. Dimon: AIG wasn’t a big deal. Merkley: Analysts disagree. Moving on. But if you applied Old testament justice you mentioned you would have gone down and been out of a job. On Volcker. Banks should be in lending business, not hedge fund biz. Agree? Dimon: We are not in hedge fund biz. Merkley; Bloomberg report says you encouraged CIO to seek profit by speculating in credit derivatives. That sounds like a hedge fund at your direction. Dimon: Here are the facts. The avg rating is AA+ on CIO. Avg. yield 2.7%. Characteristics of a conservative portfolio. And we have $150B in central banks. Less loans to deposits conservative. Merkley: David Olson, former head of credit trading, said you wanted to ramp up more risk. Dimon: I don’t believe everything I read. Merkley: Assets in CIO up 5-fold in four-year period. When bets go bad, instead of taking responsibility, you blame unit. Shouldn’t you take personal responsibility? Dimon: CIO conservative. But I am responsible for synthetic portfolio, buck stops with me. Merkley: Taking deposits and putting them into high-risk instruments different from Volcker firewall. Puzzled by your response. Dimon: Already confessed to sins of synthetic credit side. Doesn’t discount the $350B portfolio. Merkley: So you will return to the strategy of safe, and liquid investments. Dimon: That’s where we are.

…Vitter: (missed it) Dimon: We never argued on capital as a whole, but needs to be calculated. Vitter: Do you think big banks should have larger capital requirements. Dimon: Yes. Vitter: How big? Dimon: I think you should have said 8%. Vitter: That’s smaller than it is. Dimon: Problem is we don’t know where it is yet. Vitter: Swiss requiring 19%. Overkill? Dimon: Yes, but 19 not comparable to my 10%. But those banks dwarf size of those countries. Vitter: True version of the Volcker rule that makes sense? Dimon: I think we’re going to struggle to get it right, because written so vaguely. Vitter: But if we started over? Dimon: Unnecessary when added on top of other stuff. If you said the intent was too much risk on trading books, I think there are ways to do that. Current rule too confusing. Vitter: What’s simple way? Dimon: Proper capital and liquidity. Vitter: I endorse concept of smarter, stronger regulation. Vitter: More problems coming? Dimon: I don’t know if we’ll never make a risk again. We do think it’s isolated.

…Hagan: Talk about the trades. Particularly the size. Press reports mentioned strange movements in swap indexes. How could it be so large without coming to everyone’s attention? Dimon: Disclosure could hurt shareholders, can’t say everything. It was a complex series of trades and we’re managing that risk down. Should never have gotten this size. Hagan: VaR. In May JPM changed how you calculated how much CIO could lose in one day. When decisions made? Dimon: New model in January 15. By April we didn’t know how bad it was. We found model problem in May. We made announcements to correct errors, and put the old model back. Hagan: Why did new model fail? Dimon: More detail later. Would have been more accurate looking at past two years. But future is not the past. Old model better predicted some things in April and May. Hagan: Would move to expected shortfall be better? Dimon: Impt to stress test properly. But you can’t rely on models to run businesses.

…Hagan: You said CIO added positions to reduce risks. Explain why it would be problematic under Basel? Dimon: We thought it was an ineffective use of risk-weighted assets. Hagan: Why didn’t other parts of business experience similar reductions. Dimon: You can’t always reduce it because customer-driven.

…Bennet: I’m last. Thanks for response to Kohl about difficulty borrowers are having with responsiveness, I’ll take you up on your offer. You said that CIO maintains credit portfolio with intent to hedge along with portfolio conservatively managed. Why those two in same place? Dimon: Didn’t have to be. But that consolidated everything, rational place to put it. Other parts of the business hedge credit exposure. Bennet: I support hedging exemption, but different places might have had value. You said transaction could have been handled by unwinding. Why not do that? Dimon: They thought what they did was more cost-efficient to reduce exposure and maintain hedge against fat tail events. Bennet: Since you’re here, this is unrelated, talk about our relative position vs. Europe on not accomplishing what we need to do on fiscal side (oh jeez). Dimon: Europe has serious issues. Good reason for EU, very complex with 17 nations. US has serious issue. Fiscal cliff ex. It may not wait until Dec. 31, markets and businesses may take action before that to hurt economy. Better to do something now. Have to get our fiscal act in order. Road map I like, not every piece, called Simpson-Bowles. Reduce uncertainty. Would urge support for something like that. Specifics aren’t as important.

…Shelby: Do you know of any bank that has been well-capitalized, well-regulated and well-managed that has failed? Dimon: No. Shelby: We’ve closed 500 banks in last 4 years, mostly from bad loans. No substitute for capital? Dimon: Correct.

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David Dayen

David Dayen