oldfart
Older than dirt
The London Whale that is. A year and a half ago Dimon was leading the charge to gut Dodd-Frank and garnering some Democratic support, it looked like derivatives would remain totally unregulated, and capital requirements for investment banks would remain obscenely low. But 2013 turned out to be a positive year for financial regulation and lowering systemic risk. We have JP Morgan to thank for it.
Losing $6 billion on illegal and unsupervised trading put a damper on the idea that Wall Street was doing such a fine job of self-regulation that implementing Dodd-Frank was burdensome and unnecessary. The $20 billion in fines that followed underlined the point.
So maybe financial re-regulation might come about after all. In a decade or so, we might have even reduced systemic risk enough to lower the chances of another total worldwide financial meltdown to say 50% a decade or so. We can hope. And it's all because investment bankers and hedge fund managers never seem to get it; when the pressure and the scrutiny backs off the slightest bit they take it as a green light to do all the risky things that crash the global economy. And we really shouldn't blame them. This is the incentive system they live in, one where high risk, illegal business practices, regulatory capture, and political influence are seen as the path to success.
Losing $6 billion on illegal and unsupervised trading put a damper on the idea that Wall Street was doing such a fine job of self-regulation that implementing Dodd-Frank was burdensome and unnecessary. The $20 billion in fines that followed underlined the point.
So maybe financial re-regulation might come about after all. In a decade or so, we might have even reduced systemic risk enough to lower the chances of another total worldwide financial meltdown to say 50% a decade or so. We can hope. And it's all because investment bankers and hedge fund managers never seem to get it; when the pressure and the scrutiny backs off the slightest bit they take it as a green light to do all the risky things that crash the global economy. And we really shouldn't blame them. This is the incentive system they live in, one where high risk, illegal business practices, regulatory capture, and political influence are seen as the path to success.
