From The Hill:
Senate Majority Whip Dick Durbin (D-Ill.) on Tuesday blasted JPMorgan Chase over its $2 billion loss in a risky trade, saying that the institution had been “gambling with taxpayer insured money” and suggesting that the bank may have violated the language of the draft Volcker Rule.
“When the folks at Chase decide to invest money, they are gambling with taxpayer insured money and what it boils down to is when $2 billion are lost it just isn’t a loss for stockholders or the investors, it’s a potential loss for the American taxpayers and middle income families,” said the number two Democrat in the Senate on “CBS This Morning.”
So, the fact that the FDIC insures deposits is a free pass for the Dick Durbins to second guess investor decisions at every turn? I heard someone on NPR this morning explaining how this sort of thing needs to be stopped because pension funds are invested in JP Morgan Chase.
Look, it sounds to me like JP Morgan screwed up and they paid a pretty stiff price for it. They lost $2 billion dollars and several executives were sent packing. Maybe there do need to be more penalties of some kind as well. I’m happy to wait and see. But according to Durbin, a bank’s investment is a gamble with taxpayer-insured money. Where does that logic lead? One place it doesn’t lead? The end of “too big to fail.”
Also, you know what part of this story you never hear about? Someone made $2 billion dollars off of JPM’s bad bet as well. Maybe that’s good news for other shareholders?