Debate Club

Elizabeth Warren: Government Must Keep Banks Like J.P. Morgan Honest

By + More

When J.P. Morgan CEO Jamie Dimon announced a $2 billion loss from trades he called "stupid," "sloppy," and "poorly monitored" last week, he didn't change his mind about who he thinks should call the shots. Dimon said he would clean this mess up himself and indicated that it would be business-as-usual in no time at all. "We will learn from it, we will fix it, and we will move on." The message to those who think there should be more oversight of the biggest banks was clear: stay out.

After the crash of 2008, the country called for greater oversight of the biggest financial institutions to prevent another crash. But even after billions in taxpayer-funded bailouts, Wall Street resisted change. When the battle for financial reform took place in 2010, thundering herds of lobbyists filled the halls of Congress trying to undermine meaningful changes.

[Read the U.S. News debate: Should the Dodd-Frank Act Be Repealed?]

Even after Dodd-Frank Act became law, the fight wasn't over. Open public debate turned into guerrilla warfare over rules to put the law to work. For two years now, Wall Street bankers and their lobbyists have pushed regulators to water down those rules and have pushed for loopholes for their lawyers to wiggle through.

They have also urged Congress to gut the funding for enforcement at the regulatory agencies and to chip away at the independence of the new Consumer Financial Protection Bureau. And they have continued to bankroll candidates for public office and pour funds into their lobbying, hoping they can pull the strings without anyone noticing.

[See a collection of political cartoons on the economy.]

Too often, Wall Street banks act like they alone should decide if they have taken on too much risk. If the big bank CEOs ran different kinds of companies, ones that weren't big enough to take down the entire economy when they got it wrong, then oversight would be less critical. But reckless gambling by the big banks can affect the jobs, the pensions, and the tax bills of every American—and that means that those company's actions should be subject to careful oversight.

That's what government does: it passes laws to keep markets honest, and it puts a smart cop on the beat to enforce those laws. It is hard, but it isn't brain surgery. And it starts only if we have a Congress that has the guts to stand up to the big banks and their armies of lobbyists.

Elizabeth Warren

About Elizabeth Warren Democratic Candidate for U.S. Senate

JPMorgan Chase

Other Arguments

36 Pts
Did Bank Regulators Miss J.P. Morgan's Risky Behaviors?

No – Did Bank Regulators Miss J.P. Morgan's Risky Behaviors?

James Barth Co-author of 'Guardians of Finance: Making Regulators Work for Us'

11 Pts
J.P. Morgan and the Conceptual Confusion of the Volcker Rule

No – J.P. Morgan and the Conceptual Confusion of the Volcker Rule

Alex Pollock Resident Fellow at the American Enterprise Institute.

10 Pts
J.P. Morgan Was Gambling, Not Hedging

Yes – J.P. Morgan Was Gambling, Not Hedging

Ed Mierzwinski Federal Consumer Program Director at the U.S. Public Interest Research Group

-6 Pts
More Information Is Needed About J.P. Morgan's Loss

No – More Information Is Needed About J.P. Morgan's Loss

Douglas Elliott Fellow in Economic Studies at The Brookings Institution

You Might Also Like

See More