JPMorgan’s Dimon to testify on Capitol Hill Wednesday

JPMorgan chief executive Jamie Dimon will appear before the Senate Banking Committee on Wednesday to discuss his firm’s recent $2 billion trading loss.

Sen. Tim Johnson(D-S.D.), the committee’s chairman, outlined the questioning Dimon will face.

“While the JPMorgan trading loss does not appear to have caused systemic problems, it is a clear reminder that Wall Street continues to need better risk management, vigorous oversight and, if the rules are broken, unyielding enforcement,” Johnson said in a statement.

Dimon’s appearance before the committee comes after news surfaced in May that the risky bets of a U.K.-based trader known as the London Whale had cost JPMorgan, but not its clients, billions of dollars.

The Justice Department has launched a criminal probe into the matter.

The trading loss also has raised questions about Dimon’s position as a member of the Federal Reserve Bank of New York. When Federal Reserve Chairman Ben S. Bernanke testified on Capitol Hill last week, Sen. Bernie Sanders (I-Vermont) asked whether it was a conflict of interest to have the banker sit on the board of an entity that’s supposed to regulate his firm.

Bernanke, Reuters reported, deflected by saying it was up to Congress to answer that question.

Lee Bollinger, a member of the New York Fed’s board of directors, defended Dimon’s role with the central bank. In an interview Sunday with the Wall Street Journal, Bollinger said, “I do not think he should step down.”

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Sarah Halzack is The Washington Post's national retail reporter. She has previously covered the local job market and the business of talent and hiring. She has also served as a Web producer for business and economic news.
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