Washington, DC -- Congressman Engel said the JPMorgan Chase loss of $2 billion loss in hedge fund derivatives trading demonstrated that banks, even ‘banks too big to fail’, must be more stringently regulated so their actions don’t threaten the economy. Rep. Engel met this week with Richard Cordray, Director of the Consumer Financial Protection Bureau, to discuss ongoing efforts to strengthen the economy and protect consumers.

Congressman Engel, a senior member of the Energy and Commerce Committee, said, “News of JPMorgan Chase’s $2 billion loss due to risky hedge fund trading makes me all the more confident that Congress was right to pass the Dodd-Frank Wall Street Reform and Consumer Protection Act.  These hedge bets, and that’s all they are, expose banks to great risk, even banks too big to fail. We must be sure that the regulations being formulated by federal agencies to enforce Dodd-Frank - many of which the banking industry is fighting - are tough and effective. The loss came from trading approved by Chase’s upper management, risk they said they knew how to control.

“Specifically, we must adopt the Volker rule, to prohibit banks from making such bets with depositor’s money.  These hedge fund trades are some of the same practices that brought our economy to its knees and contributed to the Great Recession. We cannot allow them to continue.  Full implementation of Dodd-Frank, along with the Volker Rule, will protect Americans and the U.S. economy from careless risk.

###