JP Morgan’s $2bn loss was an ‘accident waiting to happen’
Senior executives at JP Morgan were given repeated warnings about the controversial unit responsible for a shock $2bn (£1.2bn) trading loss at the bank, it can be disclosed.
By Harry Wilson, and Richard Blackden
11 May 2012
Staff from the bank’s investment banking arm privately told the management – including chief executive Jamie Dimon – that the bank’s Chief Investment Office (CIO) was an “accident waiting to happen”.
Bill Winters, the former co-chief executive of JP Morgan’s investment banking division, is understood to have been among senior staff at the bank who made clear their concerns about the risks being taken by the CIO.
Mr Winters and other staff from the investment bank raised their worries, saying the unit did not fully understand the risks it was taking and was not properly managing its positions.
In a further blow on Friday night, JP Morgan’s credit rating was cut one notch by Fitch, while S&P lowered the bank’s outlook to negative from stable.