Washington’s anti-Wall Street crowd just got really, really lucky.
JPMorgan Chase & Co.’s announcement yesterday of a $2 billion trading loss from a steep bet it made is giving congressmen like Senator Bernie Sanders a renewed boost in their crusade against big banks.
Sanders is taking JPMorgan’s slipup to “reaffirm” his view to Americans that the six largest banks in the U.S. must be split up to help prevent another massive bailout. That’s something Sanders thinks really could happen with the financial industry, which he has called “the most powerful, dangerous and secretive” in the U.S.
Assets from those banks — Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, Wells Fargo, and JPMorgan — are equal to two-thirds U.S. GDP, he says. And with such deep pockets, they ought to “be investing in the productive economy creating jobs and improving our standard of living,” Sanders says.
They really shouldn’t be “making wagers or high-stake bets,” as JP Morgan did.
Democratic Senator Carl Levin of Michigan is also using this moment. He’s pushing the Volcker rule that he helped write, which would limit proprietary trading. Banks have had success in “watering down” the provision, but it’s time for regulators to step up, Levin said today on Bloomberg television. Regulators can send a message to banks to “shape up.”