J.P. Morgan Takes a $2 Billion Trading Loss
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J.P. Morgan (NYSE: JPM) & Co. has taken a $2 billion in trading loss in the last six weeks and could face an another $1 billion in losses in quarter 2 due to market volatility, Chief Executive James Dimon said Thursday in a conference call after market hours. It's a great blow to the bank, which passed through the financial crisis in better shape than many other banks. J.P. Morgan, the U.S.'s largest bank by assets, said in its quarterly regulatory filing that a plan it has been using to hedge risks "has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed."
Mr. Dimon also said that,the bank has an extensive review under way of what went wrong, and that there were "many errors," "sloppiness" and "bad judgment" on the bank's part. No one has been fired yet, as a result of the losses, but Mr. Dimon could take such action once the firm completes its review of what happened.
"We will admit it, we will fix it and move on," Mr. Dimon said. "This trading violates the Dimon principle." Hopefully J.P Morgan can get itself out of this hole without requiring a government bailout.
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