Excerpt
SUMMARY: Jeffrey Brown talks to Bloomberg's Dawn Kopecki about the losses at JPMorgan Chase and the role of government regulators in monitoring the banking industry. Plus, they discuss the scandal over the manipulation of the Libor.
JEFFREY BROWN (Newshour): The continuing questions surrounding the behavior of big banks, and the regulators who watch over them was at the center of financial news again today. The fallout arrived quickly on two fronts this morning.
JPMorgan Chase's latest report put losses from a failed trading strategy at $5.8 billion, nearly three times the original estimate. In a conference call this morning, CEO Jamie Dimon voiced hope that the problem is now contained.
JAMIE DIMON, Chairman, JPMorgan Chase: Obviously, with this one, we shot ourselves in the foot, but that is one of the things you hold capital for -- for things you're surprised about. We learned a lot. I can tell you this has shaken our company to the core.
JEFFREY BROWN: At the same time, the bank also reported a profit of $5 billion for the second quarter.
Meanwhile, new questions arose about the Federal Reserve and a banking scandal in Britain. Barclays has acknowledged it under-reported borrowing costs in 2007 and 2008 to manipulate the so-called LIBOR, an international benchmark lending rate that affects everything from mortgages to student loans to credit cards.
Today, the Federal Reserve's New York branch said that, in 2008, its then-president, Timothy Geithner, now the treasury secretary, warned Britain's Central Bank that there were signs of trouble. A Fed summary read: "Suggestions that some banks could be under-reporting their LIBOR in order to avoid appearing weak were present in anecdotal reports and mass- distribution e-mails, including from Barclays."
More than a dozen other banks, including Citigroup and J.P. Morgan Chase, are also under investigation in the LIBOR scandal.
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