--White House says losses show need for Wall Street reform
--White House says shareholders, not taxpayers, should suffer from the losses
-White House criticizes those trying to water down regulations
(Updates with comments from the White House press secretary beginning in the 4th paragraph.)
By Jared A. Favole
The White House said Monday the losses at JPMorgan Chase & Co. (JPM) reinforce the need for stricter oversight of Wall Street and criticized people who say rules for banks should be watered down.
"This event only reinforces why it was so important to pass Wall Street reform, and why it is so important to implement Wall Street reform," White House Press Secretary Jay Carney said Monday while en route to New York with President Barack Obama.
The White House's comments won't comfort Wall Street, which feared the $2 billion-plus loss at JPMorgan last week would be used as evidence to hand more power to bank regulators. The chief executive of the bank, Jamie Dimon, said over the weekend the firm's losses come at a "very unfortunate, inopportune time" as regulators are still crafting rules governing banks.
The losses also play into a key theme of the president's re-election bid, as Obama says Wall Street banks need to be reigned in to prevent taxpayers from suffering when bankers make poor decisions. Obama advocated heavily for reforming Wall Street reform in the wake of the financial crisis, and the White House sees the trading loss as proving him right.
"We can't prevent bad decisions from being made on Wall Street," Carney said. He said the Dodd-Frank financial overhaul is important because it helps prevent "the taxpayer from bearing the burden of the mistakes that Wall Street makes."
He said it's important that "those who are suffering losses because of what happened here are shareholders, and the bank itself, and not average Americans, who had nothing to do with these transactions."
Carney said the U.S. needs to "resist the efforts of Republicans and Wall Street lobbyists to undo" Wall Street reform.
"It's amazing given the events that we've seen in the last few days, that there are still those who are out there arguing that we should repeal Wall Street reform, that we should let Wall Street write its own rules again," Carney said.
When asked if he was referring to Dimon, who has pushed back against bank regulations, Carney said he wasn't speaking about anyone specifically.
-By Jared A. Favole, Dow Jones Newswires; 202-862-9256; [email protected]