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The JP Morgan Chase building is seen March 24, 2008 in New York City.
JPMorgan Chase is the largest bank in the United States and it has also become the most criticized bank in the nation after the bank’s Chief Executive Officer, Jamie Dimon, revealed last week that it lost $2 billion in risky credit default swap trading. The bank’s enormous loss is the latest sign of big banks' ability to engage in unsafe business practices and face few legal consequences.
Until now, Dimon was a vocal opponent of increased banking regulation, but he appears to have changed his tune in the last few days to be more open to regulation. Advocates of increased regulation are using JPMorgan’s staggering loss as evidence that more bank oversight and guidance is needed, while others insist that big banks are simply too big.
Five U.S. banks - JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs - held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the country's economy, according to Bloomberg Businessweek. Today these banks are approximately twice as large as they were a decade ago relative to the economy. If just one of these banks fails, it would clearly have disastrous consequences for the global economy.
Should big banks be broken apart to reduce the risk they pose to the economy? Why hasn’t the U.S. government led by the Obama administration done more to safeguard the economy from risky large-scale investments?
Phil Mattingly, news reporter, Bloomberg
Senator Bernie Sanders, (I-VT); member of the Senate Committee on the budget
Robert Borosage, Co-Director, Campaign for America’s Future