“JPMORGAN’S DIMON CALLS FOR SEC
PROBES INTO BETS AGAINST BANK STOCKS
“JPMorgan Chase’s chief executive Jamie Dimon has called on US regulators to look into the behaviour of investors betting against bank stocks as part of official efforts to ‘finish’ the banking turmoil.
“Four lenders have failed while some hedge fund short sellers have made large profits from bets against such stocks in the past two months. Regulatory action to deal with the bank collapses has failed to halt falls in some lenders’ shares.
“‘The SEC has the enforcement capability to look at what people are doing by name in options, derivatives, short sales,’ said Dimon in an interview, . . . echoing a recent call from a US banking lobby group.
‘If someone’s doing anything wrong, people are in collusion or people are going short and then making a tweet about a bank, they should go after them and vigorously,’ he added.” [Emphasis added.]
Also last week, my friends at Wachtell, Lipton called for the same thing. And I mean, why not? You’d think that a banking panic would not be a great moment for regulators to get all laissez-faire-minded. But no. More broadly, I’m at a loss to understand why the federal government hasn’t indicated it will move heaven and earth—raising FDIC insurance limits in some way would be a good start—to prevent this current hiccup from snowballing into something worse. This really shouldn’t be difficult.
How about some government action over the bank turmoil?
By Thomas K. Brown,
PULL OUT THE STOPS: I pretty much agree with all of this:
“JPMORGAN’S DIMON CALLS FOR SEC
PROBES INTO BETS AGAINST BANK STOCKS
“JPMorgan Chase’s chief executive Jamie Dimon has called on US regulators to look into the behaviour of investors betting against bank stocks as part of official efforts to ‘finish’ the banking turmoil.
“Four lenders have failed while some hedge fund short sellers have made large profits from bets against such stocks in the past two months. Regulatory action to deal with the bank collapses has failed to halt falls in some lenders’ shares.
“‘The SEC has the enforcement capability to look at what people are doing by name in options, derivatives, short sales,’ said Dimon in an interview, . . . echoing a recent call from a US banking lobby group.
‘If someone’s doing anything wrong, people are in collusion or people are going short and then making a tweet about a bank, they should go after them and vigorously,’ he added.” [Emphasis added.]
Also last week, my friends at Wachtell, Lipton called for the same thing. And I mean, why not? You’d think that a banking panic would not be a great moment for regulators to get all laissez-faire-minded. But no. More broadly, I’m at a loss to understand why the federal government hasn’t indicated it will move heaven and earth—raising FDIC insurance limits in some way would be a good start—to prevent this current hiccup from snowballing into something worse. This really shouldn’t be difficult.