WASHINGTON — Jamie Dimon's testimony on Wednesday is shaping up to be one of Capitol Hill's most anticipated events of 2012 with respect to financial policy.

Following is a cheat sheet for what topics are liable to be covered, who is likely to hit Dimon, the head of JPMorgan Chase, the hardest, and what to look out for at the Senate Banking hearing, which gets under way at 10 a.m. Eastern time and will air live on C-Span.

Watch Dimon's tone

This may be the toughest challenge facing Dimon, generally known for his straight-shooter reputation and master-of-the-universe personality.

On the one hand, he has to come off with some air of contrition. His bank messed up, something he's already admitted as much publicly. Yet he also can't back down in the face of what are likely to be strong Democratic attacks that the JPMorgan losses are proof of the need for stronger regulation.

Can he toe the line between pushing back against the Senate Democratic narrative without coming off as arrogant? And how does he respond to Republicans who will argue the incident is proof of the need for higher capital requirements?

This is hardly Dimon's first Congressional appearance — he acquitted himself well when he testified alongside seven other bank CEOs during the financial crisis — but there are significant differences this time. In 2009, he was running what was considered the healthiest of the big banks and doing so alongside other prominent executives. This time he's answering specific questions about his bank's massive trading loss and is the only witness.

Strengthening the Volcker Rule

Expect one or several Democratic senators to challenge Dimon, in the context of JPMorgan's trading losses, about his efforts to weaken the regulators' proposal for the Volcker Rule. Dimon has argued for an exception for so-called portfolio hedging to the Volcker Rule's ban on proprietary trading.

Democratic Sens. Jeff Merkley and Carl Levin have tagged this provision of the regulators' proposal the "JPMorgan Loophole," though it is not clear whether JPMorgan's losing trades would have been allowed under the proposed rules.

Dimon will likely try to defuse this line of questioning by emphasizing — as he has done repeatedly — that he agrees with the stated intent of the Volcker Rule.

Breaking the Big Banks Up

It's pretty much a no-brainer that Democratic Sen. Sherrod Brown, who is sponsoring a bill to limit the size of the big banks, will ask Dimon whether the JPMorgan trading loss proves the bank is "too big to manage."

At a hearing last week, Brown said, "Mega-banks are not just too big to fail. They're too big to manage, and they're too big to regulate."

The real question isn't even how Dimon responds to this (obviously, he won't agree). What's important to watch is how many Senate Democrats agree with Brown — and whether any Republicans join in.

The big banks' primary fear isn't a tougher Volcker Rule, but a groundswell of support for the more radical suggestion pushed by Brown. The Ohio Democrat has been bolstered by a growing collection of regulators and policy heavyweights, including former Federal Deposit Insurance Corp. Chairman Sheila Bair; Tom Hoenig, the former president of the Federal Reserve Bank of Kansas City; and Richard Fisher, the Dallas Fed chief, who have endorsed measures to break up the big banks.

So far, however, that idea has not caught fire among lawmakers. In the unlikely event that Dimon gives a poor performance at the hearing, doing so could significantly help Brown make his case. Dimon's job, then, is to seem in control of his bank and confident it will not make a similar mistake in the future.

How much capital is enough?

While Democrats are concerned about the Volcker Rule and want to use the JPMorgan hearing to defend Dodd-Frank against GOP attacks, Republicans have their own narrative: tougher capital requirements, rather than complicated regulations, are the best way to protect taxpayers from Wall Street's risky bets.

Last week, when bank regulators testified on the trading losses at JPMorgan, GOP Sens. Richard Shelby, Bob Corker and Pat Toomey all made this argument. After the hearing, Shelby suggested that the 7% capital requirement mandated by Basel III wasn't high enough.

But Dimon has argued that the stricter capital rules under Basel are "anti-American," even calling on the U.S. to withdraw from the international accord. He has taken particular issue with the proposed capital surcharge on the largest global banks and the limitation on counting mortgage servicing rights toward Tier 1 capital.

The question is: has Dimon's stance changed since JPMorgan's trades went sour? If he digs in his heels Wednesday against Republican calls for stronger capital rules, he could find himself in a lonely place. While Republicans challenge Dimon on capital requirements, Democrats will hit him for his opposition to that and other Dodd-Frank regulations.

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