1 of 3. JP Morgan Chase and Company Chief Executive Officer Jamie Dimon (2nd Left) waits to testify before the U.S. Senate Banking, Housing and Urban Affairs Committee hearing on 'A Breakdown in Risk Management: What Went Wrong at JPMorgan Chase?' on Capitol Hill in Washington, June 13, 2012. 
 
 WASHINGTON (Reuters) - JPMorgan Chase & Co Chief Executive Jamie Dimon used his much anticipated appearance before lawmakers to apologize for the bank's multibillion-dollar trading loss but he also made clear he will still criticize how Washington tries to curb Wall Street. 
 
 The Senate Banking Committee scheduled the hearing to grill Dimon on how a hedging strategy in a seemingly low-risk London office morphed into a complex bet that has produced at least $2 billion in losses. 
 
 Dimon, confident and amiable through most of Wednesday's hearing, appeared angry only briefly in an exchange with a senator over whether JPMorgan needed taxpayer assistance during the 2007-2009 financial crisis. 
 
 Analysts said the appearance was a success for Dimon as he revealed few new details about the trading losses, struck a contrite tone when needed, and punched back when provoked. 
 
 "There was uncertainty going into the testimony today and that uncertainty is now off of the table," said Gerard Cassidy, an bank equity analyst at RBC Capital Markets. "There is relief in the market." 
 
 Shares of JPMorgan, the largest U.S. bank by assets, closed up 1.6 percent on Wednesday, outperforming the KBW Bank Index, which closed down slightly. 
 
 Dimon told senators the trades started as a genuine hedge that would make the firm a lot of money if a credit crisis hit, staring down questions about whether it was really a speculative bet hidden from shareholders and regulators. 
 
 "This particular synthetic credit portfolio was intended to earn a lot of revenue if there was a crisis. I consider that a hedge," Dimon said. "What it morphed into, I will not try to defend." 
 
 But Dimon was not so chastened that he backed off of his long-standing criticism of Washington reforms. 
 
 The 2010 Dodd-Frank financial oversight law, he said, has produced a swarm of uncoordinated regulators, and he warned policymakers that they must carefully craft the Volcker rule ban on banks making speculative bets with their own money. 
 
 Dimon said Washington must not overreact to JPMorgan's trading loss and tighten new rules so much that it hurts financial markets. 
 
 "We have the widest, deepest, and best capital markets in the world. It would be a shame to shed that out of anger." 
 
 Dimon and his bank are no strangers to Washington. 
 
 JPMorgan is known for having worked for years to develop good relationships with lawmakers and spread campaign money among Democrats and Republicans on the banking committee. It also gained luster by smoothly navigating the financial crisis. 
 
 The bank has so far spent $1.3 million on federal candidates in the 2012 election cycle, according to OpenSecrets.org. 
 
 "One of the things that surprised me about the session was that the kid gloves were on," said Paul Miller, head of financial services research at FBR Capital Markets. 
 
 "When they asked him tough questions about risk and whether the bank was running a hedge fund, he avoided answering and they didn't push him. The bank lobby got what they wanted today, and that's why the stock is up." 
 
 'DEAD WRONG' 
 
 As he did with Wall Street analysts in a surprise conference call on May 10 to announce $2 billion or more of trading losses, Dimon admitted to the senators that he had made a mistake in April when he stated that press reports of trading troubles were a "tempest in a teapot." 
 
 "When I made that statement, I was dead wrong," Dimon said. 
 
 While Dimon took responsibility, he also spread blame around the bank, starting with once-trusted lieutenant Ina Drew, who was chief executive of the Chief Investment Office (CIO) until she resigned after the loss was announced. 
 
 Asked about why he made his "tempest in a teapot" comment, Dimon said he had been assured by Drew, by company risk officers and his chief financial officer that it was an isolated issue. 
 
 "I have a right to rely on them," Dimon said. 
 
 Asked if he had approved the trading strategy, Dimon said, "No. I was aware of it, but I did not approve it." 
 
 Dimon told the committee that people throughout his management chain of command had failed. "You can blame it on anyone in that chain," he said. 
 
 The hearing brought calls from senators for the bank to claw back pay from executives who were involved with the loss. Dimon assured the panel that JPMorgan directors will likely do that after completing their investigations. 
 
 "We can clawback for even things like bad judgment," Dimon said. The action would be the first of its kind for the company, he said. 
 
 Though Dimon admitted during the hearing that he had made big mistakes, he declined in a CNBC television interview shortly afterward to say if he will give up any of his own pay, which last year amounted to $23 million, including a bonus of $4.5 million. 
 
 WHAT DIMON KNEW 
 
 Dimon was also asked in the CNBC interview about a January change in the CIO's value-at-risk model that allowed the unit to disguise its spike in risk-taking. 
 
 Dimon said, "I was copied on a memo that said there was a change in the VaR model, so that is going to come out... I paid virtually no attention to it." 
 
 He also said he did not learn before late April that the new model was badly flawed. 
 
 The firm did not disclose the risk model change in a timely manner, which experts said could be a focus of the Securities and Exchange Commission's investigation into the trading losses. 
 
 The Commodity Futures Trading Commission and FBI have also said they are looking into the losses. 
 
 Dimon said the failed hedging strategy sprung from a firm-wide effort to reduce risky assets to prepare for the rollout of new capital standards agreed to as part of the international Basel agreement. 
 
 The bank could have simply reduced the amount of these risky assets on its books, Dimon said, but the CIO office instead, starting in mid-January, "embarked on a complex strategy" that involved adding positions traders believed could offset the existing risky assets. 
 
 In hindsight, the strategy created even more hard-to-manage risks in the synthetic credit portfolio. 
 
 BAILOUT BLUSTER 
 
 Senators asked about the state of the losses, but did not demand that Dimon give a detailed update on the portfolio, which JPMorgan is still unwinding. The bank is expected to provide more information to shareholders when it reports its second-quarter results in mid-July. 
 
 Dimon did say that the bank's "fortress balance sheet remains intact" and that he expects the second quarter to be solidly profitable. 
 
 Democratic Senator Robert Menendez seized upon Dimon's comments and reminded him that JPMorgan received $25 billion in federal support during the financial crisis. 
 
 "I think about the fortress balance sheet you talked about and I would like to remind you that the fortress balance sheet has a moat that was dug by taxpayers," Menendez said. 
 
 Democratic Senator Jeff Merkley also pointedly reminded Dimon that JPMorgan, now the nation's largest bank by assets, received Troubled Asset Relief Program assistance during the financial crisis. 
 
 "I think you were misinformed. I think that misinformation is leading to a lot of the problems we are having today. JPMorgan took TARP because it was asked to by the Secretary of the Treasury," a testy Dimon said. 
 
 Dimon is scheduled to appear before the House Financial Services Committee, along with bank regulators, on June 19. 
 
 (Reporting By Dave Clarke, Alexandra Alper, David Henry and Aruna Viswanatha; Additional reporting by Rick Rothacker in Charlotte, N.C. and Jed Horowitz in New York; Writing by Karey Wutkowski; Editing by Tim Dobbyn) ||||| A Senate panel on Thursday issued a scathing assessment of JPMorgan's $6.2 billion trading loss last year. The investigation found that bank executives ignored growing risks and hid losses from investors and federal regulators. 
 
 Executives at JPMorgan understated the trading losses to federal examiners by hundreds of millions of dollars and dismissed questions raised about the trading risks, according to the report from the Senate Permanent Subcommittee on Investigations. 
 
 The report suggests that key executives, including CEO Jamie Dimon, were aware of huge losses at the bank, even while they were downplaying the risks publicly. The report also blames federal regulators for lax oversight that allowed America's largest bank to pile up risky bets. 
 
 On Thursday, JPMorgan acknowledged it made mistakes but rejected any assertions that it concealed losses or risks. A spokesman declined to comment directly on the accusation that Dimon knew of the trading loss in April. 
 
 "While we have repeatedly acknowledged mistakes, our senior management acted in good faith and never had any intent to mislead anyone," JPMorgan said in a statement Thursday. "We know we have made many mistakes .... We have taken significant steps to remediate these issues and to learn from them." 
 
 Sen. Carl Levin, the subcommittee's chairman, said the probe showed "many, many failures" at the bank, some of them "serious and indeed egregious." 
 
 The committee will question bank executives and regulators Friday at a hearing on the trading loss. 
 
 In April, news reports said a trader in JPMorgan's London office known as "the whale" had taken huge risks that were roiling the markets. Dimon immediately dismissed the reports as a "tempest in a teapot" during a conference call with analysts. 
 
 But in May, Dimon acknowledged that the bank had lost roughly $2 billon. And during testimony to a separate Senate panel in June, Dimon said the bank showed "bad judgment," was "stupid" and "took far too much risk." 
 
 The figure was later revised to more than $6 billion. 
 
 JPMorgan executives said publicly that the trades were made for the purpose of hedging against risk. An internal report at the bank blamed traders in the London unit for trying to hide the size of the loss and not keeping bank executives informed. 
 
 But the Senate report says executives inaccurately said the trading decisions were based on a long-term strategy and that the trading positions were fully transparent to regulators. And, it says there is evidence that Dimon and other key executives had information in April about the operation's huge and complex portfolio, as well as its losses for three straight months. 
 
 The bank "gambled away billions of dollars through risky and exotic trades, then intentionally hid its losses from investors and the public, showing complete disregard for risk management procedures and regulatory oversight," Sen. John McCain, the subcommittee's senior Republican, said Thursday. 
 
 The loss came less than four years after the 2008 financial crisis and hurt the reputation of a bank that had come through the crisis known for taking fewer risks than its competitors. Three employees in the London office were fired _ two senior managers and a trader. And Ina Drew, the chief investment officer overseeing the bank's trading strategy, resigned. 
 
 The trading loss also raised concerns that the largest banks still pose risks to the U.S. financial system. 
 
 The Senate report criticized the oversight of JPMorgan's trading operation by the Office of the Comptroller of the Currency, a Treasury Department agency. It said the agency failed to investigate the trading even when the London operation several times blew through pre-set risk limits, failed to notice when the unit didn't submit several required monthly reports, and accepted other reports that omitted key data. 
 
 "The OCC takes this matter very seriously. ... We are very disappointed that the bank misinformed the OCC, which hampered our supervisory efforts," agency spokesman Bryan Hubbard said Thursday. "We will take additional action as appropriate." 
 
 The agency acknowledges that there were shortcomings in its oversight of JPMorgan, Hubbard said. As a result of its review, the OCC has taken steps to improve its supervision of financial institutions, he said. 
 
 In January, the OCC and the Federal Reserve ordered JPMorgan to take steps to correct weak risk management that led to the trading loss. The bank wasn't fined under the agreements. It promised to strengthen its policies and procedures to control risk. 
 
 Drew will be among several witnesses Friday. So will former Chief Financial Officer Douglas Braunstein, who is accused in the Senate report of misleading investors during the April conference call. Comptroller Thomas Curry and two other agency officials also are scheduled to testify. 
 
 Shares in New York-based JPMorgan Chase & Co fell 26 cents, or 2 percent, to $49.96 in extended trading Thursday after the committee issued its report.
– JPMorgan Chase CEO Jamie Dimon plans to apologize before members of Congress tomorrow for a trading loss that has cost the bank more than $2 billion. He also will say that the bank has taken steps to make sure it does not happen again. "We have let a lot of people down, and we are sorry for it," Dimon says in testimony prepared for his appearance before the Senate Banking Committee. "While we can never say we won't make mistakes—in fact, we know we will—we do believe this to be an isolated event," Dimon says. The Wall Street Journal has the full text, in which Dimon also castigates traders for badly misunderstanding the risks involved and "generally ineffective" managers for failing to rein them in, notes the Journal.