* Says did Fed a favor buying Bear Stearns
* New regulations will cost more than $1 billion annually
WASHINGTON, Oct 10 (Reuters) - JPMorgan Chase & Co Chief Executive Jamie Dimon said his company has lost up to $10 billion as a result of the government asking him to buy teetering Wall Street firm Bear Stearns during the financial crisis.
“I‘m going to say we’ve lost $5 billion to $10 billion on various things related to Bear Stearns now. And yes, I put it in the unfair category,” Dimon said, speaking at a Council on Foreign Relations event.
Dimon said the losses come from litigation and writedowns, among other expenses. JPMorgan reports third-quarter earnings on Friday.
Last week, JPMorgan was hit with a fresh civil lawsuit from the New York’s attorney general, seeking to hold the bank accountable for allegations that Bear Stearns deceived investors buying mortgage-backed securities.
In response to a question on Wednesday about the lawsuit, Dimon said he needed to set the record straight and emphatically said JPMorgan did the Federal Reserve “a favor” by buying Bear Stearns in early 2008.
He told a senior regulator at the time of the deal, “Please take into consideration when you want to come after us down the road for something that Bear Stearns did, that JPMorgan was asked to do this by the federal government,” Dimon said.
Dimon said it is a “real close” call about whether he would do the deal again. And, the government’s appetite to go after JPMorgan for Bear Stearns’ activity could have a chilling effect, he said.
“I‘m a big boy. I’ll survive...But I think the government should think twice before they punish business every single time things go wrong.”
During the wide-ranging discussion, Dimon also touched on financial reforms and the firm’s recent multibillion-dollar trading loss.
JPMorgan could see more than $1 billion in annual overhead costs from new international and domestic financial regulations, including the Basel III capital standards, he said
Dimon criticized regulators for pushing out contradictory and overlapping regulations.
He also assigned himself personal responsibility for not realizing that a risky hedging strategy in the firm’s London office could warp into a trading loss that has reached at least $5.8 billion.
“I should have caught it...I didn‘t.”
He said the trading loss was “really intensely stupid” and “it’s kind of embarassing personally.”