Sen. Bob Corker, a senior Republican on the Senate Banking Committee, has called for a hearing on $2 billion in losses reported Thursday by banking giant JPMorgan Chase & Co.
In a letter to the committee's chairman, Sen. Tim Johnson, D-S.D., Corker asked for the hearing to be held "as expeditiously as possible."
According a Wall Street Journal report, the bank announced Thursday it had taken $2 billion in trading losses in the past six weeks and could face up to $1 billion more in second-quarter losses. The U.S. Securities and Exchange Commission has also begun a preliminary investigation into the matter.
The text of Corker's letter is as follows:
Dear Chairman Johnson,
I am writing to you today to ask that we put together a hearing as expeditiously as possible into the events surrounding the JPMorgan Chase & Co. trading losses.
I believe that we need to know the answers to the following questions:
1. Are we confident that taxpayers are fully protected from losses at major financial institutions?
2. Were these bona fide hedging transactions, or were these poorly managed proprietary trades? And what, precisely, is the distinction?
I have been vocal in my belief that we need a vibrant capital market for debt and equity securities and about the need for balance in ensuring that we have a financial system that can meet the needs of a 21st-century economy. That said, clearly the losses posted by JP Morgan are significant, and as policymakers, we should understand in detail what has transpired.
I thank you for your time and look forward to working with you on this important issue.
United States Senator