JP Morgan is still making headlines as it answers questions about how it could have lost so much money (the actual figure is well into the billions, but no one seems to know just how much for sure). The Senate Banking Committee has starting to hear testimony in a hearing to discern what happened under Mr. Dimon's watch. But as this summary points out, the panel was more interested in trashing regulators than the bank itself.
The main criticism being heard during this hearing is that the Dodd-Frank Act, and specifically the Volker Rule, should have foreseen this catastrophe at JPMC, and should have done more to prevent it. In other words, regulators were the root cause of the problem. The Senate committe members also took time to complain about regulations in general, seeming to be of the opinion that regulations were to blame for gross mismanagement of risk at the bank, and its eventual financial meltdown.
Funny story here. The Volker Rule part of the Dodd-Frank Act has not gone into effect yet. So, these Senate committee members are criticizing a regulatory measure that has not even gone into effect yet, and that their own party has been trying to stop.
The Volker Rule is a rewrite of the Glass-Steagall, which was repealed in the late 90's, and which separated consumer banking from speculation practices. It's worth noting here that JPMC lost all this money betting it on risky securities, the same practice that caused the 2008 crisis.
Why should we care about he Volker Rule? Because banks are no longer just places to put your money. The big banks, like Bank of America and JPMC, not only keep your money but also trade in securities, futures, and stocks with their own assets on the line in order to generate huge profits. When Glass-Steagall was in place, speculative practice and consumer banking had to be kept separate. The reason was, all of the consumer deposit money is federally insured, meaning the government subsidizes those accounts with tax dollars in the event of a fiscal crisis. So, when a bank like JPMC loses $2 Billion or more of it's own money, they are actually setting up a situation where they may accept tax money to keep them afloat. You know that whole "too big to fail" thing? This is where that comes from. This is why we bailed out the banks under Bush and Obama. This is why something like JPMC is a red flag and should be regulated against.
Unfortunately, it doesn't appear Senate Republicans really get that. And it's no wonder, considering who's paying for their reelection. Check the link above for that information as well.