JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon sought to hide escalating trading losses that surpassed US$6.2 billion, misled investors and dodged regulators as a “monstrous” derivatives bet deteriorated last year, a Senate probe found.
Earlier today, as part of our JPM earnings recap we observed that "VaR plunged from $106 to $62" and wondered if it was just just "another excel copy/paste error" which as we reported previously, is what JPM's internal audit attributed much of the confusion surrounding JPM's VaR calculation around the time the London Whale blow up nearly doubled the firm's VaR.
Deutsche Bank is going to need some money, and it's going to need some quite soon. The next two or three articles that I write will focus on why there is such a need. In a concerted effort to reduce or potentially eliminated the risk of taxpayer-funded bail-outs of European banks, the EU implemented a new “bail-in” regime beginning on January 1, 2016.
In a research note published Thursday, RBC Capital Markets has maintained an Outperform rating on Bank of America Corp (NYSE:BAC) Stock, stating that after the Fed’s stress test, the risk and reward ratio on the bank is attractive. The sell-side firm mentions the first impressions of the bank after its Comprehensive Capital Analysis and Review (CCAR) capital plan. RBC analyst, Joseph K Morford also maintains a $19 price target on the BAC stock.
It was considered one of the bigger paradoxes for years. Back in 2003, Warren Buffett famously dubbed derivatives “financial weapons of mass destruction” and yet over the next several years went ahead and entered a number of the contracts, including both equities and credit, ostensibly by selling CDS to collect monthly premiums, although not to the same degree as AIG, which infamously had to be bailed out due to massive losses on its CDS book.
The U.S. has charged two former JP Morgan traders over the $6 billion 'London Whale' trading lost in the bank's London Chief Investment Office last year. Charges against former managing director Javier Martin-Artajo and Julien Grout, a low-level trade, include wire fraud and conspiracy to falsify books and records.
The losses from JPMorgan's botched derivatives trade may reach $9 billion, nearly five times the amount announced in May, the New York Times reported Thursday.The Times quoted an unnamed source as saying a report generated in April showed that in a worst-case scenario the losses from the trade could reach $8-9 billion, but said some regulators expect something closer to $6-7 billion.Last week the CNBC business news network had also said the final losses would not exceed $6-7 billion, given that the company had moved quickly to unwind the position.
Regulators are trying to clamp down on rogue traders like JPMorgan Chase's Bruno Iksil, nicknamed the London Whale, who amassed large positions in credit derivatives as part of a complex trading strategy that eventually soured.