JPMorgan Chase & Co. (JPM:US)’s trading loss of about $2 billion underscores the need for the “common-sense regulation” of the financial industry that presumed Republican nominee Mitt Romney would push as president, his campaign spokeswoman said today.
The loss “demonstrates the importance of oversight and transparency in the derivatives market,” something “Romney has called for in the past,” Andrea Saul, his press secretary, said in a statement.
If elected, Romney would push for “common-sense regulation that gives regulators tools to do their jobs and that gives investors more clarity,” she said, without specifying.
Romney has called for repeal the Dodd-Frank law that tightened regulation of financial institutions, which includes a ban on proprietary trading by banks with federally insured deposits. President Barack Obama helped guide the measure into law in 2010.
Romney, co-founder of private-equity firm Bain Capital LLC, didn’t respond to a question from a reporter about the JPMorgan loss at a campaign rally in Charlotte, North Carolina this afternoon.
Asked what kinds of financial regulation Romney would support as president, his campaign pointed to comments he made last year while campaigning in New Hampshire. He said then he said he would favor regulating derivatives and imposing different capital requirements on different forms of securities.
The campaign also referred to the 59-point economic plan Romney released on Sept. 6, 2011.
“Some of the concepts in Dodd-Frank have a place,” Romney wrote in that document. “Greater transparency for inter-bank relationships, enhanced capital requirements, and provisions to address new forms of complex financial transactions are all necessary elements of effective financial reform. But these concepts must be translated into law in a way that creates a simple, predictable, and efficient regulatory system appropriate for our dynamic economy.”
Obama’s re-election campaign used the disclosure of JP Morgan’s trading losses to criticize Romney’s call for less financial regulation.
“Rolling back Wall Street reform, as Mitt Romney proposes, would be reckless,” Lis Smith, an Obama campaign spokeswoman, said in a statement. “Returning to the failed policy of letting Wall Street write their own rules would put all of us at greater risk of another financial crisis and leave us vulnerable to another taxpayer-funded bank bailout like the one shortly before President Obama took office.”
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