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JPMorgan Trading Loss May Reach $9 Billion
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| Contributor | RP |
| Last Edited | RP Jun 28, 2012 10:43am |
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| Category | Analysis |
| Author | JESSICA SILVER-GREENBERG and SUSANNE CRAIG |
| News Date | Thursday, June 28, 2012 02:00:00 PM UTC0:0 |
| Description | Losses on JPMorgan Chase's bungled trade could total as much as $9 billion, far exceeding earlier public estimates, according to people who have been briefed on the situation.
When Jamie Dimon, the bank's chief executive, announced in May that the bank had lost $2 billion in a bet on credit derivatives, he estimated that losses could double within the next few quarters. But the red ink has been mounting in recent weeks, as the bank has been unwinding its positions, according to interviews with current and former traders and executives at the bank who asked not to be named because of investigations into the bank.
The bank's exit from its money-losing trade is happening faster than many expected. JPMorgan previously said it hoped to clear its position by early next year; now it is already out of more than half of the trade and may be completely free this year.
As JPMorgan has moved rapidly to unwind the position - its most volatile assets in particular - internal models at the bank have recently projected losses of as much as $9 billion. In April, the bank generated an internal report that showed that the losses, assuming worst-case conditions, could reach $8 billion to $9 billion, according to a person who reviewed the report. |
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