Keith Bedford/ReutersJamie Dimon, chairman and chief executive of JPMorgan Chase.Jamie Dimon has a love-hate relationship with the Volcker Rule. On Monday, he was showing the love.
“I don’t disagree with the intent of the Volcker Rule,” Mr. Dimon, JPMorgan Chase’s chief executive, told fellow bankers in a speech on Monday. While he confirmed a perspective conveyed in earlier statements, Mr. Dimon took a more moderate stance on the regulation than in the past when he had warned that the rule could have “huge negative unintended consequences.”
The Volcker Rule, which regulators are in the process of finalizing, would prohibit big banks from trading with their own money. The intent, Mr. Dimon noted, was to prevent blowups that prompt government bailouts.
“Believe me, I’ve got the same interest,” he told attendees at the Deutsche Bank Global Financial Services Investor Conference on Monday.
It was Mr. Dimon’s latest public appearance following his bank’s disclosure of a multimillion-dollar trading loss, a debacle that has emboldened proponents of the Volcker Rule.
It is unclear whether JPMorgan’s suspect trades would be banned under the current version of the rule, but many advocates of Wall Street regulation say that the incident highlights the need for a broad crackdown. In an initial draft, the Volcker Rule allowed banks to place trades that hedge their exposure to various risks faced across the firm, as JPMorgan initially did in its trades. In JPMorgan’s later trades, however, the positions may have morphed into proprietary bets.
On Monday, Mr. Dimon underscored the importance of the hedging exemption.
“I think that legitimate portfolio hedging is a good thing,” he said. Mr. Dimon, showing flashes of his earlier Volcker Rule angst, added that regulators “have to be very careful,” so that Washington doesn’t “throw the baby out with the bathwater.”
He was not always that measured. Mr. Dimon has long complained that the rule could go too far, telling CNBC earlier this year that under the Volcker Rule, “if you want to be trading, you have to have a lawyer and a psychiatrist sitting next to you determining what was your intent every time you did something.”
He also directed some scorn at Paul A. Volcker, the former Federal Reserve chairman who championed for the rule that bears his name. “Paul Volcker by his own admission has said he doesn’t understand capital markets,” Mr. Dimon once said. “He has proven that to me.”