The chairman of the House Oversight and Investigations Subcommittee used yesterday's congressional hearing on JPMorgan Chase's recent trading losses to slam the federal financial regulators for failing to do their jobs correctly.
Rep. Randy Neugebauer, R-Texas, pointed out that the Office of the Comptroller of the Currency and the Federal Reserve had more than 100 regulators within JPMorgan Chase's offices, yet the bank's $2 billion in trading losses was uncovered by the media. Neugebauer stated that this incident bore more than a passing resemblance to the circumstances leading up to the 2008 economic crash.
‘For me, this is an eerily familiar story,’ he said. ‘Five years ago, we had 12,000 regulators who missed the subprime mortgage crisis, the Madoff fraud, and the Stanford scheme. So what did we do? We nearly doubled the number of regulators under Dodd-Frank.’
Neugebauer added that increasing the quantity of regulators is not synonymous with improving the quality of their work.
‘In Texas, we have an expression for a hound that's not much use out in the field,’ he continued. ‘We say, 'That dog won't hunt.' You can't bring down game by buying more dogs from the same litter and expecting them to somehow develop that instinct. Right now, I don't think the problem is that we don't have enough regulators. The problem is that the regulators aren't doing their jobs – they don't hunt.’Â
Neugebauer also observed that a surplus of congressional attention was being aimed at JPMorgan Chase's woes instead of federal losses, including $170 billion in red ink from the government-sponsored enterprises.
‘Before we criticize a private company for mismanaging money, let's get our own house in order,’ he said. ‘Let's stop wasting taxpayer money on failed regulations and more government bureaucracy.’