Despite JP Morgan being run by one of the "smartest" bankers, it still lost money, making a strong case for Wall Street reform says the US President
New York: US President Barack Obama has said the $2 billion trading loss by 'one of the best managed banks' JP Morgan will be investigated and it demonstrates the need for reform at Wall Street, reports PTI.
Had a bank not as strong as JP Morgan made the losses through betting, the government would have had to step in, said Obama, who was in the city to give the commencement address at Barnard College and attend fundraisers event.
Despite JP Morgan being run by one of the "smartest" bankers, it still lost money, making a strong case for Wall Street reform, he added. "JP Morgan is one of the best-managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost two billion dollars and counting," President Obama said in an interview with ABC's 'The View'. The full episode will air on Tuesday.
"We don't know all the details. Its going to be investigated, but this is why we passed Wall Street reform," said the President.
Obama said Wall Street reform is "important" as financial giants like JP Morgan are able to weather an error that the bank's own CEO called "egregious," but smaller institutions would not be able to take such huge hits.
"This is the best, or one of the best-managed banks. You could have a bank that isn't as strong, isn't as profitable making those same bets and we might have had to step in," Obama said, adding, "That's exactly why Wall Street reforms so important."
While touting his efforts to rein in the Wall Street behaviour that led to the massive taxpayer bailout of the banks following the 2008 financial crisis, he said his administration is still fighting for tough reform.
Obama said, "Now we are still fighting this battle because all these regulations are being put in place as we speak, a lot of the financial industry is still fighting, they have hired tons of lobbyists to push back on this stuff and I hope that everyone who is watching is lettering their members of congress know, you know what we want these rules in place to make sure this stuff does not happen again."
He added that had all his proposals passed by the Congress and implemented into law, such a thing would not have happened, he said. "But this, again, is going to be part of what the election is about," Obama said.
The president said Wall Street reform is one of the many critical areas where Obama and his Republican challenger, presumptive GOP nominee Mitt Romney, differ.
"We have got real differences here, because Governor Romney, some of the Republican members of Congress and the financial industry have been arguing that this is unnecessary, that this is impeding capital formation," Obama said.
He added, "...But what makes us the best financial industry is transparency, accountability, rules so that small investors feel like if they put their money into Wall Street, it is not going to suddenly just disappear. They are not going to be defrauded."
Addressing graduating women at Columbia University's Barnard College, Obama made a reference to the JP Morgan loss and talked of regulation of the financial services industry.
"We know that we are better off when there are rules that stop big banks from making bad bets with other people's money and when insurance companies are not allowed to drop your coverage when you need it most or charge women differently from men," he said.
In the wake of the derivatives-trading loss, JP Morgan has announced that its Chief Investment Officer Ina Drew would retire. Drew had been at the helm of the bank's office that invested the firm's own money.
Apart from being a big blow for the banking giant that tackled the 2008 financial meltdown well, the whopping derivative-trading loss has also ignited fresh concerns on the risk taking ways of the Wall Street.
Even after a 20-year effort, the special court is discussing the possibility of pushing the...
Under the new ATC system, flights are taking direct route and there is no deviation from path which ultimately helps in reducing flight timing and saving fuel to the tune of 1.28 crore litres per year
Nagpur: About 600 nautical miles around Nagpur is now safe from mid-air mishaps, thanks to the new Air Traffic Control (ATC) automation system 'Indra' at the international airport at Nagpur, which will also help saving up to 1.28 crore litres of aviation fuel every year, top airport officials said.
The Dr Babasaheb Ambedkar International Airport is the first to rationalise the new ATC Automation System imported from Spanish company Indra, among the 38 airports in the country, which are also installing the system commissioned in last February.
The Airport Authority of India (AAI) recently made it operational at Nagpur. Following this, Bhopal and Hyderabad airport radars have been integrated with the airport here, Ashok Kumar Verma, Airport Director, Nagpur told PTI.
Also, Jharsugada and Ahmedabad will be integrated very soon, Mr Verma said adding that the new system has enabled reduction of human errors, enhanced capacity and reduced carbon footprint.
Under the new system, flights are taking direct route and there is no deviation from path which ultimately helps in reducing flight timing and saving fuel to the tune of 1.28 crore litres per year, he said.
Besides, an ATC can locate any aircraft once it enters the jurisdiction and can direct the pilots to ascend in case the flight is losing height at a safe distance to avoid mid air collision. The enhanced safety nets include conflict alarms and minimum safe altitude warning alarm, Mr Verma added.
He said there are approximately 700 aircrafts movements per day from Europe, Middle East and Africa to South East and East Asia and most of the domestic traffic from North to South and East to West passes over Nagpur controlled airspace.
Maintaining a safe and expeditious flow of traffic across Nagpur airspace is thus a tough task which the Nagpur ATC is handling.
Mr Verma said the news system is already operational in 138 countries in the world. Besides, the new system will enable the airplanes to reduce the flight timing of 1064 hours in a span of a year and save flying distance of 5,10635 nautical miles.