New York: US President Barack Obama has said the $2 billion trading loss by “one of the best managed banks” J P Morgan will be investigated and it demonstrates the need for reform at Wall Street.
Had a bank not as strong as JP Morgan made the losses through betting, the government would have had to step in, said Obama, who was in the city to give the commencement address at Barnard College and attend fundraisers event.
Despite JP Morgan being run by one of the “smartest” bankers, it still lost money, making a strong case for Wall Street reform, he added.
“JP Morgan is one of the best-managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost two billion dollars and counting,” Obama said in an interview with ABC’s ‘The View’. The full episode will air on Tuesday.
“We don t know all the details. It s going to be investigated, but this is why we passed Wall Street reform,” said the President.
Obama said Wall Street reform is “important” as financial giants like J P Morgan are able to weather an error that the bank s own CEO called “egregious,” but smaller institutions would not be able to take such huge hits.
“This is the best, or one of the best-managed banks. You could have a bank that isn t as strong, isn t as profitable making those same bets and we might have had to step in,” Obama said, adding, “That s exactly why Wall Street reforms so important.”
While touting his efforts to rein in the Wall Street behaviour that led to the massive taxpayer bailout of the banks following the 2008 financial crisis, he said his administration is still fighting for tough reform.