US President Barack Obama said on Monday the huge trading loss at JPMorgan Chase & Co illustrated the need for Wall Street reform and warned that the same kind of error at a less stable bank may have required government intervention.
“JPMorgan is one of the best managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost $2 billion and counting,” Obama said on ABC's “The View,” according to a transcript released by the network.
“We don't know all the details. It's going to be investigated, but this is why we passed Wall Street reform,” Obama said.
The program was taped on Monday in New York and will air on Tuesday.
Wall Street reform was one of Obama's signature domestic policy achievements, but he has faced opposition in trying to implement and enforce it.
“The whole point was, even if you're smart, you can make mistakes and since these banks are insured, backed up by taxpayers, we don't want you taking risks where eventually we might end up having to bail you out again, because we've done that, been there, didn't like it,” Obama said, according to the transcript.
“This is the best, or one of the best managed banks. You could have a bank that isn't as strong, isn't as profitable making those same bets and we (the government) might have had to step in, and that's exactly why Wall Street reform's so important.”
Obama, a Democrat, said his support for greater financial oversight differentiated him from Mitt Romney, the presumed Republican presidential nominee.
“We've got real differences here, because Governor Romney, members - some of the Republican members of Congress and the financial industry have been arguing that this is unnecessary, that this is impeding capital formation,” Obama said.
“We want a successful financial industry. That's always been one of the hallmarks of America. But what makes us the best financial industry is transparency, accountability, rules so that small investors feel like if they put their money into Wall Street, it's not going to suddenly just disappear.” - Reuters