JPMorgan's Dimon to testify before Senate panel

By msnbc.com news services

Updated at 6:54 p.m. ET: JPMorgan Chase CEO?Jamie Dimon will be heading to Washington to?testify?before a Senate Committee investigating massive?trading losses recently?announced by the bank.

Senate Banking Committee Chairman Tim Johnson, D-S.D., said the panel?hold hearings on Tuesday and June 6 at which federal regulators will provide information on the trading loss, which has been put at?$2 billion and growing.

Dimon would testify at a third hearing sometime later, Johnson said.

"As always, we will continue to be open and transparent with our regulators and Congress," JP Morgan spokesman Kristin Lemkau said in a statement. She said Dimon has agreed to?appear before the panel.

Last week JPMorgan announced that it has suffered at least $2 billion in losses due to a "flawed" hedging strategy executed by its London-based chief investment office. The trades apparently were designed to protect against Europe-related credit risk.

Johnson said committee staff has been discussing the losses with regulators and the bank since they were disclosed.

"Our due diligence has made it clear that the Banking Committee should hear directly from JPMorgan Chase's CEO Jamie Dimon, and following our two Wall Street reform oversight hearings I plan to invite him to testify," he said in a statement.

Earlier this week Richard Shelby, the ranking Republican on the committee, said Dimon should testify before Congress.

Dimon this week apologized to the bank's shareholders for the loss.

"This should never have happened. I can't justify it. Unfortunately, these mistakes are self-inflicted," Dimon said at JPMorgan's annual shareholders meeting.?He later told reporters, "The buck always stops with me."

News of JPMorgan's trading loss has reinvigorated Democrats' push to strengthen a key rule mandated under the 2010 regulatory overhaul that would restrict banks from trading for their own profit.

Democratic lawmakers and other proponents say the trades that led to the losses at JPMorgan would have violated the so-called Volcker Rule.

Dimon has been among the most outspoken critics of the rule. He says the loss came from a hedging strategy that backfired, and not a bet with the bank's own money.

He and other bank executives successfully pushed for an exemption, which would allow banks to make trades for their own profit if they are hedging against risk.

On Thursday, Democratic Sens. Carl Levin of Michigan and Jeff Merkley of Oregon asked top federal regulators to strip the exemption from rule. Levin and Merkley were the original authors of the rule.

The Volcker Rule takes effect this July. Banks have two years to comply with the regulations.

Embattled JPMorgan Chase CEO and Chairman Jamie Dimon survived a vote that would have taken away his role as chairman of the company's board. Meanwhile, the Justice Department is launching an investigation into how the bank lost more than $2 billion from risky trades. NBC's Ann Thompson reports.

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