The CEO of JPMorgan Chase will testify before the Senate Banking Committee on Wednesday, where he will apologize for losing $2 billion in shareholders' money, while simultaneously trying to convince lawmakers that it wasn't that a big deal.
Jamie Dimon released his prepared statement last night providing a preview of what he plans to say today, and the gist of it is: Oops. He admits there were screw-ups, but basically throws his bank's risk management team under the bus, saying the strategy of the Chief Investment Office was "poorly conceived and vetted"; CIO's traders "did not have the requisite understanding of the risks they took"; and their bosses and oversight teams "were generally ineffective in challenging the judgment of trading personnel."
Those bosses include him, of course, and he does admit that senior management did not give the CIO enough scrutiny. He will also say the magic word: "Sorry."
This portfolio morphed into something that, rather than protect the Firm, created new and potentially larger risks. As a result, we have let a lot of people down, and we are sorry for it.
But it's the CIO, not the larger bank, that got "revamped" and saw its leaders replaced. Dimon isn't going anywhere — even though he built the CIO and picked its top managers. His remarks then quickly turn to focus on, in Dimon's own words, "perspective."
We will not make light of these losses, but they should be put into perspective. We will lose some of our shareholders’ money – and for that, we feel terrible – but no client, customer or taxpayer money was impacted by this incident.
His statement spends almost as much time explaining how well JPMorgan is doing as it does explaining what went wrong. After all, Dimon's ultimate goal is to keep Congress from throwing more rules at him. He has to show that he feels bad about losing all that money, but remind the Senators that banks lose money all the time. Making them wards of the state won't fix that.
All of these activities come with risk. And just as we have remained focused on serving our clients, we have also remained focused on managing the risks of our business, particularly given today’s considerable global economic and financial volatility.
In other words: Don't worry. We got this covered.