JPMorgan Ignored Risk Warnings in Pursuing Fail Whale Trade

By: Tuesday May 15, 2012 10:00 am

One thing to understand about the Fail Whale debacle at JPMorgan Chase is that there were lots of warning signs. The trades were public knowledge for over a month; in fact, that’s part of the reason they failed so spectacularly, as hedge funds got wind of the trades and started taking the other side of the bet. Jamie Dimon simply ignored the red flags.


JPMorgan’s $2 Billion Loss Shows Impotence of the Volcker Rule

By: Friday May 11, 2012 6:40 am

I spent most of yesterday afternoon laughing my ass off about Jamie Dimon’s London Whale loss, but it’s actually not all that funny.

Too Failed to Be Big? Public Citizen Petitions Federal Regulators to Break Up Bank of America

By: Wednesday January 25, 2012 9:00 am

Too failed to be big? Today, Public Citizen will send a formal petition to the Federal Reserve Board of Governors and the Financial Stability Oversight Council to break up Bank of America. The petition asks them to “recognize that the Bank of America Corporation . . . poses a ‘grave threat’ to the stability of the United States financial system and to mitigate that threat, as provided by section 121 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.”

Geithner: Systemic Risk Is Whatever I Say It Is (You’re Welcome, Citigroup)

By: Friday January 14, 2011 7:00 am

Shahien Nasiripour’s article about Citibank’s near-bankruptcy in November 2008 shows how silly it is to expect safety by creating a “systemic risk council,” one headed, I might add, by Tim Geithner. He basically applies the Potter Stewart principle to systemic risk, saying that he’ll know it when he sees it. And somehow, I’d guess that he’ll see systemic risk in any big bank that goes down.

Rep. Brad Miller: “Protecting Bank Solvency Has Been a Goal of Treasury That I Do Not Share”

By: Friday November 19, 2010 7:58 am

One of the more amusing moments of yesterday’s House Financial Services Committee hearings on foreclosure fraud was when the representatives for the loan servicers were asked why they were subsidiaries of the large financial institutions. The link between the servicers and the big banks, mainly caused by a series of mergers, leads to all kinds of conflicts of interest, because it inevitably pairs them up with the originator or trustee of the loan. The servicers had no real answer to this question. Finally, the Wells Fargo representative claimed that it was for “customer convenience,” because some customers had their mortgage and their checking accounts at the same bank.

Everyone’s jaw dropped in the hearing room.

Now Miller is out with a letter, signed by all the top leaders of the House Financial Services Committee, that seriously ratchets up the demands on the Financial Stability Oversight Council. Among other things, it asks the FSOC to use its authority under Dodd-Frank to force the large financial institutions to divest from the loan servicers.

Congressional Oversight Panel Report Highlights Systemic Risk of Foreclosure Fraud

By: Tuesday November 16, 2010 8:40 am

The Congressional Oversight Panel, the TARP watchdog program formerly chaired by Elizabeth Warren and now helmed by former Senator Ted Kaufman, has released a report detailing the failures in the mortgage servicing industry, and the threats to the overall housing market, financial sector and greater economy. The report is chilling.

Grayson Wants Foreclosure Fraud Investigated as Systemic Risk, Calls for National Moratorium

By: Thursday October 7, 2010 4:15 pm

In a letter to the Financial Stability Oversight Council, the board made up of chief regulators of the financial industry, Rep. Alan Grayson has called for a national moratorium on all foreclosures because of the systemic risk of fraudulent practices.

Will Snowe and Co. Reject FinReg Because of the Kanjorski Amendment?

By: Sunday July 11, 2010 5:00 pm

When the Senate returns into session this week, they may have a final vote on the Dodd-Frank financial reform bill. We know that Russ Feingold is the only Democrat who opposes the legislation, so that’s 57 votes in favor, pending a replacement for Robert Byrd. There’s a path to 60 without the Byrd replacement. Susan Collins has already basically endorsed, and Scott Brown proclaimed that he “likes what he sees.” Even Chuck Grassley may break ranks and vote yes on cloture. But Olympia Snowe had an interesting reaction yesterday:

Sen. Kaufman Lays Out FinReg Conference Game Plan

By: Thursday May 27, 2010 6:30 am

Barney Frank announced his conferees for the Wall Street reform bill Wednesday, and he made the important point that the focus on the specific names is a little misplaced. The views of the leadership, and the White House, and what can garner the requisite votes, will factor into the ultimate decisions as much as the specific conferees involved. Frank called his conferees “the agents of collective decision-making than autonomous deciders.”

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