JPMorgan Chase announced this morning that a bad trade had cost the bank $5.8 billion this year—almost triple its original estimate—raising the prospect that traders had improperly tried to conceal the blunder. “This has shaken our company to the core,” CEO Jamie Dimon says. The bank says managers tied to the bad trade had been dismissed without severance pay and that it plans to revoke two years’ worth of pay from each of those executives. JPMorgan says it lost $4.4 billion because of the trade from April through June, and its chief financial officer confirms the bank has lost an additional $1.4 billion in the first three months of the year. Dimon’s original estimate of the loss from the bad trade, disclosed in a surprise conference call with Wall Street analysts on May 10, was $2 billion. The bank says an internal investigation, including emails and voice messages, had called into question the values that traders placed on certain bets, and that the traders may have been seeking to mask losses. Many lawmakers on Capitol Hill have pointed to the investment blunder by the nation’s biggest bank as evidence that the banking industry is not over-regulated and may need additional oversight.
Today’s poll question: Do you think the banking industry is adequately regulated?
