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From:
Sent:
To:
Subject:
Jeffrey Epstein <jeevacation@gmail.com>
Tuesday, March 30, 2010 8:18 PM
Re: Fw:
blather.. simply world regulations should not set up a system to play one c=untry against another, the regulators shoudl
deal with it and coordinate w=th global players.
On Tue, Mar 30, 2010 =t 4:08 PM,
wrote:
Sent from my BlackBer=y° wireless device
=gt;
Subject:
Peter, What follows are some brief speaking points that we would use in discussing=the Volcker plan with
Summers. We can speak to them when we talk tonight.
The Federal government's guarantee of bank deposits enhances consumer confi=ence in our financial system.
Although deposits play a lesser role as a funding source following decades of bank disintermediation, it is
sensible for government (as any guarantor would want) to seek limits on how funds sourced from their guaranteed
deposits are exposed to risk.
Well-managed US banks with prudent controls to protect client interests, including depositors', already do this
respecting the intent of existing affil=ate restrictions and with internal procedures separating proprietary and fiduciary
activities.
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Updating regulation to the reality of global modern markets should not disadvantage U S institutions or create
structural conflicts in relation to their Asian or European counterparts.
Fiduciary: Asset Management
Regulations that protect client investments from other banking activities have proven successful during recent
financial crises.
Commercial Banks have been managing client assets for over 100 years and this fiduciar= role has withstood
both time and evolutionary change in client demand from traditional to alternative investment products.
Asset Management is a profitable business entirely suited to fiduciary bank owner=hip with limited capital needs
and no risk weighted assets. Practically, there is no difference between sponsorship of hedge and private equity fund=
and traditional products like mutual and money funds.
Bank owned asset managers should not be allowed to combine proprietary resources with fiduciary money in
hedge funds, private equity or traditional investment vehicles.
=AO
Prohibiting bank ownership of asset managers is unnecessary and eliminates a source of prudent diversification
for client holdings and long-term profit stabili=y for regulated firms.
Proprietary: Risk Management and Discretionary Trading
Proprietary trading is a natural outgrowth of the market-making role and it is difficul= to separate these
activities.
<1=>
Proprietary trading supports management of interest rate risk, creating greater lending flexibility; it also plays a
vital role for banks akin to the research and development arm of a corporation.
Prop Desks should be tightly regulated, scaled correctly, and subject to sizeable capital requirements applied
consistently across all systemically relevant firms.
We are concerned that hedging trades can be misconstrued through legislatio= as proprietary because they
escape simple definition and lack precise confo=mity to unique client exposures.
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Client transactions frequently require long duration hedges or hedges that can only approximate underlying
positions. This is highly complex and best left to the regulators to oversee. A static legislative definition of proprietary
trading can impair meaningfully a bank's ability to mana=e risk.
If the Volcker Rule had been in place during the financial crisis, it would no= have prevented the bank failures
that occurred.
=span style="font-
size:8.0ptcolor:#5F5F5F">
Jes Staley<=span> I Chief Executive =fficer I Investment Bank I J.P. Morgan 1270 Park Avenue, 47th Floor I T: +1
e
This email is confidential and subject to important disclaimers and conditi=ns including on offers for the
purchase or sale of securities, accuracy an= completeness of information, viruses, confidentiality, legal privilege, a=d
legal entity disclaimers, available at http://www.jpmorgan.com/pages/=isclosures/email
chttp://www.jpmorgan.cogpages/disclosures/email> .
The information contained in this c=mmunication is confidential, may be attorney-client privileged, may constitute
inside information, and is intended only for the use of the a=dressee. It is the property of Jeffrey Epstein Unauthorized
use, di=closure or copying of this communication or any part thereof is strictl= prohibited and may be unlawful. If you
have received this communication in error, p=ease notify us immediately by return e-mail or by e-mail to
jeevacation@gmail.com, and destroy thi= communication and all copies thereof, including all attachments.
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