JPMorgan's (JPM)Jamie Dimon is back on Capitol Hill today, testifying before the House Financial Services Committee and at least one person is wondering: Is this trip really necessary?
"Hearings are helpful when they explain complicated issues, but they're pointless when grandstanding is the main agenda item," writes Rick Newman, chief business correspondent at U.S. News & World Report.
There's only a handful of sitting members of Congress with even a passing understanding of modern banking, Newman says, raising the issue of whether the industry is 'too complex to regulate.'
Indeed, the odds are low Tuesday's testimony will address any of the questions left unanswered (and unasked) in last week's Senate hearing, including:
- The current size of JPMorgan's "London Whale" loss and how that "hedge" morphed into a $2-plus billion setback.
- When Jamie Dimon and other senior executives became aware of problems in the firm's Chief Investment Office. (The Wall Street Journal reports there were internal concerns at JPMorgan about the CIO office as far back as 2010.)
- Why JPMorgan implemented a new measurement of value at risk (VAR) in January, which Dimon testified "did effectively increase the amount of risk this unit was able to take."
"This is the farce that financial regulation has become," Newman writes. "Instead of dog-and-pony shows like this, we ought to have clear and tough regulations that everybody understands. If somebody breaks the rules, they should be investigated, prosecuted, and jailed if necessary."
But it's not illegal to lose money and JPMorgan isn't seeking any government assistance, Newman says in the accompanying video. Dimon is appearing voluntarily -- and probably looking at the hearings as a way to repair his image, and the firm's, in the wake of a $2-plus billion loss on the so-called London Whale trades.
Perhaps more important is how members of Congress use the hearings. Much has been written and discussed about how the Senate Banking Committee fawned over Dimon, whose firm has donated to the political campaigns of all-but two members.
House hearings are typically less genteel and Dimon can expect some tough questioning from Democrats like ranking member Barney Frank and Maxine Waters of California.
Still, the securities industry donated over $4 million to members of the House Services Financial Committee between 2011-2012, according to AgendaProject.org. Committee chairman Spencer Bachus (R-AL) received nearly $1.3 million of the funds, including $119,000 from JPMorgan, so it's safe to say Dimon has some friends on the committee.
More from The Daily Ticker