Obama About JP Morgan Crisis: That Is ‘Why Wall Street Reform Is So Important’

US president says the crisis at JP Morgan clearly shows ‘why Wall Street reform is so important.’

President Barack Obama said on Monday the huge trading loss at JPMorgan Chase & Co illustrated the need for Wall Street reform and warned that the same kind of error at a less stable bank may have required government intervention. Photo: By Matt Ortega Matt Ortega/Flickr

Just a few hours after a top JPMorgan Chase executive Ina Drew retired in the wake of a stunning $2 billion trading loss, President Obama told the hosts of ABC’s “The View” that the bank’s risky bets exemplified the need for Wall Street reform, reports Yahoo.

“JPMorgan 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 $2 billion and counting,” Obama said on ABC’s “The View.”

“We don’t know all the details. It’s going to be investigated, but this is why we passed Wall Street reform,” Obama said.

The president’s comments came the day that Ina Drew, a top executive who worked for JPMorgan for three decades and supervised the trading desk responsible for the loss, announced her retirement, tells The Huff Post.

Jamie Dimon, JP Morgan’s chairman and chief executive, said on Sunday there was “no excuse” for the disastrous series of bets it made under the guidance of Ina Drew. Later on Tuesday Dimon is face angry shareholders who want him to step down as chairman.

Wall Street reform was one of Obama’s major domestic policy achievements, but the president has faced opposition in trying to implement and enforce it, according to Reuters.

“The whole point was, even if you’re smart, you can make mistakes and since these banks are insured, backed up by taxpayers, we don’t want you taking risks where eventually we might end up having to bail you out again, because we’ve done that, been there, didn’t like it,” Obama said in the interview.

“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 (the government) might have had to step in, and that’s exactly why Wall Street reform’s so important,” the president said.

President Obama’s comments echoed the statement made by White House press secretary Jay Carney earlier on Monday. Carney said JPMorgan Chase’s loss proved that the reforms put in place after 2008’s financial crisis were necessary.

“This is strong evidence that having these rules of the road in place are essential to making sure that taxpayers don’t get left holding the bag,” Carney saids peaking to reporters on Air Force One. “We have to remain ever vigilant.”

President Obama also highlighted during the interview that his support for greater financial oversight differentiated him from Mitt Romney, the presumed Republican presidential nominee.

“We’ve got real differences here, because Governor Romney, members — some of the Republican members of Congress and the financial industry have been arguing that this is unnecessary, that this is impeding capital formation,” President Obama said.

“We want a successful financial industry. That’s always been one of the hallmarks of America. But what makes us the best financial industry is transparency, accountability, rules so that small investors feel like if they put their money into Wall Street, it’s not going to suddenly just disappear,” the president added.

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