Crony Capitalism: After Lobbying Against New Financial Laws, JPMorgan Loses $2B in Risky Bet

JPMorgan Chase, the nation's largest bank, is under fire after losing at least $2 billion in derivatives trading it was warned carried high risk. The loss has renewed calls for tougher regulation of Wall Street, with critics saying JPMorgan could have avoided it under regulations the bank opposed. We're joined by former financial regulator, white collar criminologist, and University of Missouri-Kansas City Professor William Black, author of "The Best Way to Rob a Bank is to Own One." Black says JPMorgan's latest woes stem from the flaws endemic to "too big too fail." "Allowing [banks] to be this big, even conservative economists call this 'crony capitalism,'" Black says. "The only way this can work is to shrink the systemically dangerous institutions -- the 20 largest banks in the United States -- down to the point that they no longer pose a systemic risk. [When] they are no longer too big to fail, they will no longer have this implicit federal subsidy that completely distorts competition [and] ... destroys democracy because these giant institutions have so much political power."

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• Category

  News & Politics

[thedelta88]

"The Best Way to Rob a Bank is to Own One"... best title EVER!

[starkweather444]

The differences between the MSM and Democracy Now! have never appeared more stark as when Amy Goodman is reporting on what the President said on The View. Surreal times.

[keyblademk23]

basterds have the money and resign

[sgpquek]

Go to TRNN - The real news network and look for episodes of him disclosing all the fraud right back to the Reagen era. Dems aren't spared either. Fact is Glass steagal was repealed during Clinton's presidency. Summers, Rubin, Greenspan, Geithner and JP Morgan, CHase, Citi etc lobbies come before Paulson and Goldman sachs lobbies.

[Tobacc0]

For years now I've been watching Bill Black and his excellent advice go incomprehensibly ignored. Looking again now, I think one reason may be that Bill is a solid academic and therefore too polite. If he believes his case so strongly (I do) then he should name names HARD and accusingly (Geitner => Lackey, Fraud) in the administration. Instead of a puzzled expression he could use his cred to firebrand and scorch the JPMGSBoACG puppets.

[Mopar21277]

@6:30, Dimon the Orwellian, whats black is white...

Dodd-Frank is a joke, JPM, BOA etc are even larger and more leveraged than in 2008. I feel another Derivatives crisis coming on, where the smaller players will be gobbled up again by the Too-Bigs, with the cost passed on to the American people.

[Mopar21277]

What a bunch of b.s. from Barry, more bamboozaling a dumbed-down audience. GLASS STEAGALL now and 1% Wall St Turn-over tax on the legal derivatives trade.

[Active Reasoner]

When a "loss" is reported the entity that won the money on the trade should be exposed as well. Perhaps the money was not "lost" at all, but went exactly where the owner wanted it to, stolen through deceptive trading practices.