<strong>WATCH: The Fallout From JP Morgan's $2 Billion Loss</strong>
Just last week, JPMorgan Chase disclosed in its 10-Q regulatory filing a $2 billion trading loss related to derivatives in its chief investment office in London.
Soon after, JPMorgan’s CEO Jamie Dimon hopped on an emergency conference call to discuss the trading blunder referring to it as an “egregious” mistake.
The news has since caused the bank’s stock to plummet and it has also renewed concerns about the need for tougher regulations.
Anyway, let’s back up a bit.
Remember back in early April when both Bloomberg and Wall Street Journal reported that a credit derivatives trader with JPMorgan named Bruno Iksil, who later became dubbed the “London Whale,” had a position that was so massive it was rattling the market?
Of course you do.
Initially, JPMorgan’s chief executive Jamie Dimon referred to those reports as a “tempest in a teapot” during the bank’s first-quarter earnings conference call.
But according to The New York Times, less than two weeks after that earnings call, JPMorgan realised it had a real problem.
So what did Dimon do? He sent in the bank’s version of the Navy Seals (aka a group of eight risk managers led by chief risk officer John Hogan) to try to remedy the situation. [via efinancialcareers]
From The New York Times (emphasis added):
Losses were mounting on the trade as hedge funds’ bets against the bank turned profitable. Conference calls between New York and London were not producing satisfactory answers. A team of risk officers now referred to as the Navy Seals began meeting twice a day, at 8 a.m. and 4 p.m., with Mr. Dimon frequently in attendance.
We’re definitely intrigued by the name “Navy Seals” given to this team. It just goes to show the high regard for risk managers during intense situations that must be rectified.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.