WASHINGTON, May 12 (UPI) -- A $2 billion loss at a U.S. bank validates the need for tougher banking regulations, Democrats on Capitol Hill said.
JPMorgan Chase announced this week it lost $2 billion in six weeks time making bad bets on the derivatives market.
Meanwhile, the so-called Volcker Rule, named after former Federal Reserve Chairman Paul Volcker, is still being shaped by policymakers at the Federal Reserve.
The rule is meant to limit or ban banks making bets on the market with their own money -- what is generally called proprietary trading. The wording for the rule is not in its final form, however. How strongly worded it will be has yet to be detrmined.
The Fed asked for public comment on the rule and were deluged with criticism from the banking community, The Hill newspaper reported Saturday.
Republicans have also been chipping away at other parts of the Dodd-Frank overhaul bill at the urging of financial industry lobbyists.
But JPMorgan's $2 billion loss, "confirms our view that there needs to be regulation. It shows that if it can happen to them, it can happen to anybody," said Rep. Barney Frank, D-Mass., ranking member of the House Financial Services Committee.
"How many times do we have to be hit in the head with a financial sledgehammer to wake up and realize we've got to take action? The big banks have been fighting Dodd-Frank tooth and nail. … Regrettably, the banks have largely been successful," said Rep. Peter Welch, D-Vt.
One of the most prominent critics of the Volcker rule has been James Dimon, chief executive officer at JPMorgan.
But Democrats say the pendulum of public opinion now should favor tougher banking regulations.
Dimon once said Volcker "doesn't understand capital markets."
Frank had an answer to that this week. "I don't think Paul has lost $2 billion recently. He's going to have to stop making cracks about how Paul Volcker doesn't understand the system," Frank said.
Facebook co-founder cancels citizenship
WASHINGTON, May 12 (UPI) -- Eduardo Saverin, a co-founder of Facebook, denied that taxes were the reason he has renounced his U.S. citizenship.
Tom Goodman, a spokesman for the former Harvard student who was an early investor in Facebook, said it was "not for tax reason," that Saverin, who was born in Brazil, is renouncing his U.S. citizenship.
"Eduardo recently found it to be more practical to become a resident of Singapore since he plans to live there for an indefinite period of time. He still has very strong ties to Brazil and is extremely passionate about not only his homeland, but also the United States," Goodman said in an e-mail.
CNNMoney reported Saturday that renouncing U.S. citizenship is very rare, but becoming more common.
Only 1,781 people did so in 2011. By comparison, less than 450 did so in 2008.
It is unclear how much of Facebook Saverin still owns, but he was not listed in a regulatory filing as owning more than 5 percent of the company.
How much his share is worth will be decided soon. Facebook is expecting to raise $1.1 billion in its initial public share offering, which is expected to occur Friday with shares priced between $28 and $35 per share.
Facebook said the average tax bill for its employees after the IPO will be $1.1 million.
Oracle chairman gives $50M to his college
SANTA BARBARA, Calif., May 12 (UPI) -- The Chairman of the Board at Oracle, Jeffrey Henley, has pledged $50 million to his alma mater, the University of California Santa Barbara, the college said.
The donation is to go to the school's College of Engineering with $30 million designated to finance a new building, Henley Hall, which will house the Institute for Energy Efficiency, the Los Angeles Times reported Saturday.
"We hope to create new opportunities for research and discovery and to support UC Santa Barbara's already strong commitment to preparing the next generation of scientists and engineers," Henley said in a statement.
Henley has been Oracle's chairman for eight years. Prior to that, he was the company's chief financial officer.
The college said with Henley's donation they have raised $718 million of a $1 billion fund raising goal.
Auto driver, designer, Carroll Shelby dies
DALLAS, May 12 (UPI) -- A legend of auto racing and auto design Carroll Shelby has died at age 89 in Baylor Hospital in Dallas, his company said.
The cause of death was not released, but Shelby's health had been in decline for years, The Wall Street Journal reported Saturday.
As far back as 1960, Shelby finished third at Laguna Seca Raceway in Monterey, Calif., in a race in which he was slowed down by having to place nitroglycerin pills underneath his tongue to stave off a possible heart attack, the Los Angles Time's obituary said.
He also survived a kidney transplant, a heart transplant and seven marriages. He lived in the fast lane, the Times said.
"Everything he touched was legendary," said Leslie Kendall, curator of the Petersen Automotive Museum in Los Angeles.
Shelby, whose name is associated with performance cars at Ford, Chrysler and General Motors, "is one of the most recognized names in performance car history, and he's been successful at everything he's done," said Edsel Ford II, great-grandson of Henry Ford.
Perhaps his most famous muscle car for the U.S. market is the Shelby Mustang.
For the native Texan, undersized was not his style. The 2013 Ford Shelby GT500 Mustang, sports the most powerful production V8 in the world with 650 horsepower.