The era of self-regulation on Wall Street needs to end now, Elizabeth Warren says.
The Democratic candidate for Massachusetts Senate told CBS News Monday that America has to say "no, the banks cannot regulate themselves." The comments were made in reference to JPMorgan Chase’s $2 billion trading loss on Thursday.
Dimon has been an outspoken critic of certain aspects of financial reform. In particular, he's focused in on the the Volcker Rule, a provision aimed at curbing the practice of banks taking risks with their own money. Although the rule remains unwritten, some have argued a strong enough version could have stopped such a loss.
"What has happened here is not just about JPMorgan Chase," said Warren, who also called the idea that banks need not be watched by regulators "fundamentally wrong" and "dangerous."
Warren's comments come amid widespread criticism of America's biggest bank by assets. White House spokesman Jay Carney told reporters on Monday that JPMorgan Chase's recent event "only reinforces why it was so important to pass Wall Street reform, why it is so important to fully implement Wall Street reform."
Democratic Representative Barney Frank, one of the authors of the Dodd-Frank financial reform legislation, also said the incident provides an argument in favor of regulation on Wall Street.
"When a supposedly responsible, well-run organization could make such an enormous mistake with derivatives, that really blows up the argument, 'Oh, leave us alone, we don't need you to regulate us,'" he said.
Warren herself already slammed Dimon over the loss. In a statement released Sunday, the one-time candidate to run the Consumer Financial Protection Bureau urged Dimon to step down from the board of the New York Federal Reserve, an institution that is often criticized for being too cozy with the Wall Street banks it is supposed to regulate.
Wall Street should "send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability," Warren said in the statement.
During the conference call announcing the bank’s loss last week, Jamie Dimon admitted the irony of the situation. “We have egg on our face," he then said.