JPMorgan Discloses $2 Billion in Trading Losses
JPMorgan Chase, which emerged from the financial crisis as the nation’s biggest bank, disclosed on Thursday that it had lost more than $2 billion in trading, a surprising stumble that promises to escalate the debate over whether regulations need to rein in trading by banks.
Jamie Dimon, the chief executive of JPMorgan, blamed “errors, sloppiness and bad judgment” for the loss, which stemmed from a hedging strategy that backfired.
The trading in that hedge roiled markets a month ago, when rumors started circulating of a JPMorgan trader in London whose bets were so big that he was nicknamed “the London Whale” and “Voldemort,” after the Harry Potter villain.
For a bank that earned nearly $19 billion last year, the trading loss, which could go higher, will not cripple it in any way. Still it demonstrates how a market blunder can shake even a financial giant that celebrates its “fortress balance sheet.”
It is a rare blow to the reputation of Mr. Dimon, 56, a native New Yorker known for his hands-on management style and a confident swagger. After successfully steering his bank through the market turmoil of 2008 and the recession, he is perhaps the most influential bank executive in the country — and a vocal critic of the efforts to write rules under the Dodd-Frank regulatory overhaul. Read More
Posted on May 10, 2012, in #financing and tagged business, Chase, financial news, financing, JPMorgan, jpmorgan chase, loss, mario tama, occupy-wall-street, politics, sotck reporting. Bookmark the permalink. Leave a comment.