The news that JPMorgan Chase lost at least $2 billion on a single trade that went sour is not evidence that the industry needs to be more stringently regulated and is instead proof that Wall Street needs even less regulation, Republican National Committee Chairman Reince Priebus said Sunday.
Republicans, who fought efforts to pass new regulations in the wake of the 2008 financial crisis and have helped weaken the regulations that ultimately passed, have largely remained silent amid widespread calls for stronger regulations since JPMorgan CEO Jamie Dimon announced the massive loss Thursday. Priebus, however, made it clear during an interview with NBC’s David Gregory yesterday that the GOP still opposes the sort of regulation that could have prevented the losses and protected taxpayers and the economy:
GREGORY: You think we need less financial regulation, rather than more?
PRIEBUS: I think we need less. I mean, the fact of the matter is, Dodd-Frank didn’t work. […]
GREGORY: So, you’re satisfied with the way Wall Street operates, with the kinds of bets that were taken by JPMorgan Chase that led to this kind of loss. You don’t think that Washington regulators can remedy that?
PRIEBUS: Certainly Dodd-Frank didn’t remedy it.
Sen. John Thune (R-SD) made a similar call on Fox News Sunday, saying, “We need to make sure we get all facts before jumping to conclusions about the need for greater financial regulation.”
It’s hard to make sense of these claims. JPMorgan’s loss is hardly proof of Dodd-Frank’s failure — the Volcker Rule, which could have prevented the trade, hasn’t yet been finalized and implemented. And if Dodd-Frank “didn’t remedy” the problem that led to JPMorgan’s losses, it’s because of the efforts of Republicans and Wall Street lobbyists, who have watered down the rule and fought to insert a loophole allowing the sort of trade that cost JPMorgan billions of dollars. At a time when it’s painfully clear that Wall Street can’t manage its own risk or prevent its own failure — even with the lesson of 2008 fresh in its mind — Priebus still thinks the industry is too heavily regulated.
“I’m not a financial expert,” Priebus later told Gregory. At least he got something right.