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Tuesday, May 22, 2012

Romney: J.P. Morgan’s $2 Billion Loss Is Someone Else’s Gain

  •  May 16, 2012, 5:18 PM
CORAL GABLES, Fla.–Mitt Romney cautioned that J.P. Morgan’s $2 billion loss shouldn’t inspire a rush for new legislation or regulation in an interview with a conservative blogger Wednesday.
Mr. Romney said the company and regulators should investigate the loss to understand what happened. But he pointed out the loss was borne by the shareholders and owners of J.P. Morgan, not the American taxpayers.
“That’s the way…America works,” Mr. Romney said in a radio interview with Ed Morrissey. “Some people experienced a loss in this case because of a bad decision. By the way, there was someone who made a gain, all right. The $2 billion J.P. Morgan lost someone else gained.” (The J.P. Morgan discussion starts about three minutes into the interview above.)
The likely Republican nominee said J.P. Morgan’s struggles differed from the problems banks faced in 2008 because the issue isn’t widespread and taxpayer dollars aren’t on the hook.
“I would not rush to pass new legislation or new regulation,” Mr. Romney said. “This is, in the normal course of business, a large loss but certainly not one which is crippling or threatening to the institution.”
Mr. Romney regularly decries regulation the Obama administration has pursued, saying the president has made it more difficult for the private sector to thrive. He often points to Dodd-Frank, the financial overhaul legislation, as an example of regulation that has hindered rather than helped American businesses. But the candidate has offered few specifics on how he would reshape the regulatory environment, except for his pledges to rollback some rules (Dodd-Frank and Sarbanes-Oxley among them) and update and streamline others.
The president, meanwhile, has used the J.P. Morgan blunder to fuel his argument for more robust oversight and regulation to prevent banks from taking the types of risks that could end in a taxpayer-funded bailout.
While Mr. Romney supported the bank bailout, officially known as the Troubled Asset Relief Program, he said Wednesday that the climate has changed and individual banks should be allowed to go under.
“My own view is that if a large bank gets in difficulty, why, it can fail,” Mr. Romney said. “There’s no reason why the shareholders or bondholders of a bank can’t lose their funds if a bank were to get in trouble.”
Sara Murray covers the 2012 presidential campaign. Follow her on Twitter

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