In his testimony before the Senate Banking Committee, Controller of the Currency chief Thomas Curry said with regard to the JPMorgan Chase (JPMC) trading loss, it will affect earnings, but does not present a solvency issue.

Curry also noted that the events at JPMC do not threaten the broader financial system. Under current market conditions, the JPMC effort to manage its positions is not creating an unusual risk of contagion to other banks. However, Curry said the OCC has directed its examiners to evaluate the risk management strategies and practices in place at other large banks, and examiners have reported there is no activity similar to the scale or complexity of JPMC.

On a more recent basis, Curry said the OCC has been meeting daily with bank management with respect to this situation, to re-evaluate the risk management activities and controls of the bank and how they applied to its CIO function, and to determine what additional action is necessary.

Curry also said the OCC is evaluating the compensation process of the CIO and will assess the bank’s determination on “claw backs” as part of that analysis. If corrective action is warranted, the OCC will pursue and implement appropriate informal and/or formal remedial measures.

In related news, a hearing is scheduled for June 13 before the Senate Banking committee, which will be the first public airing of the roles played by the OCC, Fed, FDIC and the Treasury Department in the period before JPMC CEO Jamie Dimon disclosed the trading losses tied to credit derivatives. Dimon will also testify in front of the House Financial Services Committee on June 19.

To read Curry’s comments on JPMorgan to the Senate Banking Committee, go to page 26 of his testimony,