You're watching...
University of Maryland Law Professor Michael Greenberger on whether regulations could have prevented J.P. Morgan’s losses and how it will impact len...
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Idling time but our next guest says JPMorgan's -- very similar to the beginnings of economic collapse in September 2008.
Joining us now is Michael Greenberger former director of the division of trading a market to the commodities futures trading commission -- -- title.
I -- listen Michael Jamie Dimon says Dodd-Frank would have prevented this type of losses that true I'm hearing arguments on both sides.
Well I don't know the arguments on the other side I don't know what Jamie Dimon means that they're probably five different provisions in Dodd-Frank called which Jamie Dimon.
Was aggressively trying to get repealed.
That would have prevented them from me from these losses the first one is the Volcker Rule which this is now appears to be proprietary trading.
Despite them having said they -- hedging.
And the Volcker Rule will outlaw this kind of proprietary trading with customer deposits and access the Fed window.
There's something called the Lincoln roll that doesn't let -- trade un cleared credit default swaps that would have prevented this.
If these trades had been cleared as will be required by Dodd-Frank.
They would've been capitalize collapse.
There would have been capital reserves.
It would have been collateralized.
And it would've been transparent -- let me just say this if this were transparent.
I wouldn't worry about the SEC -- That's bad is the 800 pound gorilla here this is not going to make them happy had they known about this they would have made him.
Unwind before he's now caught in quicksand with his counter parties you can't inventory.
-- -- -- -- He is on the losing side of -- and he's going to have trouble getting out of them.
And that's why he's saying watch for the future.
They can't act and may not be able to one -- positions if he's losing two billion okay somebody's gaining two.
Okay but here's -- thing.
And this is Altman nature of the beast this is all of the risk you take when you trade and it's also part of what you need to make -- loans these big banks cannot make loans.
Strictly on deposits alone there are reliant on the money they make -- prop trading -- to have money of the available to them this part of the business so would you -- is basically come down on the entire industry.
And how -- he cut.
Improve.
Listen.
These too big to fail banks they privatize their winds.
And they have the access to socialize their losses the American taxpayers spend billions and trillions.
To -- these banks in 20082009.
No loans are gonna be made on these two billion dollar losses.
No loans are gonna be made from the capital that needs to be absorbed but make this -- there's another billion dollar loss.
No loans will be made from that.
These banks are not loaning to the American consumer it's the community banks who don't do this risky trading.
The credit unions or make an -- you know.
It does so I don't think that that's the welcome then what you're saying is that all these banks do with -- money.
Which isn't sure they're trying to get loans out there the regulations are preventing them from doing that.
You should be talking about -- a Glass-Steagall.
Separating the commercial banks from the investment bank but they need that prop trading -- to keep loans going.
Of the American taxpayer doesn't need that -- prop trading desk.
The Volcker Rule is that modern day Glass-Steagall.
Jamie Dimon is the foremost opponent of it he admitted this hurts his argument.
But he still opposes it.
-- there's no reason that our deposits with JPMorgan Chase.
And JPMorgan's.
Access to the Fed window that is taxpayer money.
Should be done when they make losses if they make winds they -- have is in the Hamptons when they have extreme losses they look ties to recover.
We can agree to disagree Michael -- -- -- done on shall have you back on the show the token at about this as this of course a story of JPMorgan and perhaps -- industry as a whole widens with thank you so much for --
