A top JPMorgan exec out over $2B blunder
(CBS News) NEW YORK - The fallout continues from JPMorgan Chase's $2 billion trading fiasco.
Three top officials reportedly are on the way out at the nation's biggest bank ,including the bank's chief investment officer.
The bank said Monday Ina Drew, one of the highest-ranking women on Wall Street, is retiring.
JPMorgan Chase CEO Jamie Dimon was doing damage control on NBC's "Meet the Press" Sunday, admitting that, "We took far too much risk. The strategy we had was badly vetted. It was badly monitored. It should never have happened."
Dimon is trying to spread the message that the bank's huge loss isn't systemic and won't put his company on life support.
But he concedes JPMorgan's credibility has taken a hit.
Word that a complex trade - reminiscent of those that contributed to the financial crisis - went bad at JPMorgan caused the bank's stock to plummet more than nine percent Friday, wiping out $15 billion in shareholder value and sparking memories of the 2008 bank bailout that put taxpayers on the hook for $700 billion.
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Sen. Carl Levin (D, Mich.) leads the committee that investigated the financial crisis. He said on "Meet the Press" that, "These are the kind of bets that put us into the soup to begin with."
In 2010, Congress passed the Dodd-Frank Act to reign in Wall Street risk. But the terms of that law are still being negotiated, and there's intense lobbying from the financial industry to water it down.
Critics argue that, even when the law is in place, banks will find a way around the new rules, and it still won't be enough to stop risky trading.
However, some Republicans are concerned that too much regulation could stifle economic growth.
Others, such as Sen. Bob Corker, of Tennessee, are calling for a hearing into JPMorgan's losses.
In the meantime, there's growing concern that this is just the beginning of more problems for the financial industry.
"JPMorgan Chase and Jamie Dimon are the brightest guys in the room," points out Michael Greenberger, a professor at the University of Maryland School of Law. "If they have this problem, God knows how many other people have these problems, and this could lead us right back to where we were in 2008."
But not every bank engages in the type of practices that led to JPMorgan's massive loss. To take that level of risk, a bank must be large enough, and have access to significant capital. Some of the other banks that fit that description are Citi, Bank of America and Wells Fargo.
To see the Rebecca Jarvis report, click on the video in the player above.
