Ohio senators say JP Morgan loss highlights need for reform

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Ohio senators say JP Morgan loss highlights need for reform

WTVG – Some lawmakers In Washington are pointing to the JPMorgan Chase loss, saying it highlights a bigger problem in the banking industry. Those leaders on Capitol Hill are still worried that some banks are too big to fail.

The Dodd Frank Act is supposed to protect tax payers from bailing out banks again. It was signed into law in 2010, but two years later it’s still not finished.

“Congress was not definitive enough in that legislation. So the regulators are spending a lot of time coming up with the ideas and that is what is causing a lot of people concern,” said Senator Rob Portman.

After the JPMorgan Chase $2 billion dollar loss, one specific provision in the Dodd-Frank Act is drawing attention. It’s called the Volcker rule, and it’s aimed to prevent firms from proprietary trading. The rule isn’t in effect yet. It’s still being worked on by regulators.

“The JPMorgan folks have said they thought this was all consistent with Dodd Frank. I don’t know. The point is that this trading loss is a problem for shareholders but not for taxpayers and that’s the way, you know, you want it to be. You want the free market to work,” Portman told Washington Bureau Chief Jacqueline Policastro.

Just days before JPMorgan Chase announced its loss, a Senate Banking Subcommittee, Chaired by Senator Sherrod Brown, held a hearing to examine the Volcker Rule.

“These banks that have trillions of dollars in assets pose risk to the economy, in part because of their size and in part because of their behavior. So we need the Volker rule in place,” said Senator Sherrod Brown.

Brown is reintroducing legislation that didn’t make it into the Dodd-Frank Act the first time.

“Would have broken up those 6 banks into smaller more manageable units that would have been better for the free enterprise system, and for the financial system, and surely better for main street in Toledo,” Brown said.

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