Progressive News Feeds

In the Financial Times today, a former trader for Morgan Stanley claims that rigging of the LIBOR rate has been going on since at least 1991 . Revelations that LIBOR — a key benchmark for interest rates — was being rigged has caused a wide-reaching scandal in both European and American financial circles, and could lead to criminal charges . Based on conversations he had with other traders, Douglas Keenan wrote, “it seems the misreporting of Libor rates may have been common practice since at least 1991

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Inequality has been front and center this political season, but one relatively unexamined aspect of the problem is the way it has exacerbated the financial distress of Social Security. As work by Monique Morrissey at the Economic Policy Institute

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JP Morgan Chase CEO Jamie Dimon held a conference call today to announce the bank’s latest earnings and address the mounting losses from the so-called “London Whale” trade. So far, the bank’s losses from that trade total nearly $6 billion , and could be headed north to $9 billion . During the call, one analyst asked Dimon whether the failed trade — which was originated from a trading desk that was supposed to help the company reduce risk — shows that JP Morgan is simply too big to manage

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The Senate Banking Committee plans to call JP Morgan Chase CEO Jamie Dimon to testify following the bank’s $3 billion trading loss. “Over the past week, my staff and Ranking Member [Richard] Shelby’s staff have jointly held briefings with regulators regarding the JPMorgan Chase trading loss, as well a briefing with the company itself. Our due diligence has made it clear that the Banking Committee should hear directly from JPMorgan Chase’s CEO Jamie Dimon, and following our two Wall Street reform oversight hearings I plan to invite him to testify,” said Senate Banking Committee Chairman Tim Johnson (D-SD) in a statement. According to Bloomberg News, Dimon has agreed to accept the invitation.

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JP Morgan Chase CEO Jamie Dimon this week announced that the bank he heads lost $2 billion making risky trade under the guise of “hedging” (which is meant to reduce risk). Dimon has been one of the biggest critics of the Volcker Rule , which is meant to prevent banks from making massive bets with federally insured dollars. Dimon appeared today on NBC’s Meet the Press, where he was asked by host David Gregory if JP Morgan’s massive loss shows that the banking system — just a few years after a financial crisis that nearly brought the global economy to its knees — is still too risky. Dimon replied, “I don’t think so”: GREGORY: Have you given regulators new ammunition against the banks? DIMON: Absolutely, this is a very unfortunate and inopportune time to have had this. GREGORY: But if the best of the best can’t manage a risk like this, does it not tell you that the banking system is still several years after the financial collapse, too risky? DIMON: I don’t think so. It’s a question of size. This is not a risk that is life threatening to JP Morgan. Watch it: Of course, the point isn’t whether JP Morgan, the biggest bank in the U.S., can survive a trade like this. It’s whether the financial system can sustain this sort of trading by all of the big banks, many of which are not in the same financial shape as JP Morgan. As the New York Times detailed yesterday, JP Morgan and the rest of the nation’s biggest banks have been fighting to widen exemptions to the Volcker Rule that would allow banks to continue making risky trades of this sort. ”I hope that the final [Volcker] rule will prevent this,” said Rep. Barney Frank (D-MA), whose name graces the Dodd-Frank financial reform bill, on ABC today. “The Volcker Rule is still being formulated.”

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