JPMorgan CEO: We were honest about losses

"I believed that risk controls were properly being done," Jamie Dimon told lawmakers Wednesday.

By Roland Jones

?JPMorgan Chase?s Chief Executive Jamie Dimon appeared before lawmakers on Capitol Hill again Tuesday, saying his bank was upfront with investors about its multibillion-dollar trading loss.

?We disclosed what we knew when we knew it,? Dimon told the House Financial Services Committee in his second appearance in a week before lawmakers to explain the failed hedging strategy at his bank that saw it lose billions.

Dimon acknowledged that JPMorgan in January changed a ?value-at-risk? model for the trading portfolio in question. Also known as VAR, value-at-risk measures the expected losses in a portfolio over a given time period.

JPMorgan did not disclose the change until May 10, when Dimon also revealed that the trading portfolio had produced at least $2 billion in losses.

Dimon told lawmakers Wednesday that he believed risk controls ?were properly being done.?

Asked by one lawmaker what he thought when he first learned of the losses, Dimon said:

?When we fully realized it, I told my people everything?s going to happen, including coming down here to Washington,? he said, but determined that he should remedy the situation.

?I said let?s put our jerseys on and fix this,? he said, adding that he aims to do the right thing for the bank?s customers.

?I don?t want this to detract from all that our 260,000 people do every day,? he said.

The Securities and Exchange Commission, the Commodity Futures Trading Commission and the FBI are looking into the bank?s multibillion-dollar loss. The bank is expected to give a full update on losses resulting from the trade when it reports its second-quarter earnings July 13.

Dimon?s testimony comes on the heels of his appearance last Wednesday before the Senate Banking Committee. He was expected to receive a frosty reception. Instead, Dimon was treated cordially by most of members of the senators on the committee.

Members of the House Financial Services Committee went harder at Dimon, asking him repeatedly to defend the size of JPMorgan, the nation's largest U.S. bank by assets.

Dimon responded that JPMorgan is ?not too big to fail,? adding that he doesn?t think there?s ?any chance we?re going to fail.?

The SEC is looking into whether JPMorgan misled investors in its April earnings statements by not disclosing its change to VAR. the change potentially masked the riskiness of the trading portfolio in question.

Reuters contributed to this report.

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