Two N.C. reps question Dimon

Though neither of them made news, two of North Carolina's members of the U.S. House Committee on Financial Services questioned JPMorgan Chase & Co. CEO Jamie Dimon at the committee's hearing Tuesday on the bank's $2 billion-plus trading losses.

Republican Rep. Patrick McHenry and Democrat Brad Miller each took their allotted five minute questioning periods Tuesday during two-hour session was more pointed than the one before the Senate banking committee last week.

Democratic Rep. Mel Watt, who represents parts of Charlotte, did not appear to be in attendance. North Carolina's fourth member of the committee, Republican Walter Jones, did not ask a question and it was unclear whether he was there.

Here's what McHenry and Miller said:

Rep. Patrick McHenry

Taking a fairly combative tone, asked Dimon to identify the line between hedging and proprietary trading and made the point that they often look similar (though Dimon said in some cases there is a clear distinction).

"How long have you been in finance?" McHenry then asked.
"30 years," Dimon said.
"Let's just say a long time," McHenry continued. "You're supposed to know the difference between this. If you can't determine what that is, how can a regulator?"


Dimon didn't take the bait, instead saying that he didn't think regulators should take the approach of determining proprietary versus hedging, and instead should be focusing on capital levels in trading operations and other risk management areas.
McHenry also asked whether Dimon supports Dodd-Frank.

"That's a hard one to say," Dimon said, before saying there are parts he likes and parts he doesn't.

Finally, McHenry asked a question about the so-called "resolution authority" under Dodd-Frank, which gives regulators the ability to step in and wind down large institutions about to fail -- which Republicans call a codification of "too big to fail." McHenry asked whether it would be better for banks to go into bankruptcy.

"I don't care what you call it," Dimon said. "I'm not going to get involved in the debate."


Rep. Brad Miller

Miller focused on the bank's risk management breakdown that led to the losses. He asked Dimon about whether Chief Investment Office traders had their own risk limits, which Dimon said they did not.

Miller then keyed in on the mandatory certifications executives have to make on regulatory filings, including one that proper risk management procedures are in effect.

"Was that certification correct?" Miller asked.

Dimon dismissed the question.

"I believe it to be correct," he said. "...That's why we're having a review. The review's not done yet."

"Uh... alright," Miller said before moving on.