JPMorgan Chase Admits Big Losses - $2 Billion - On 'Egregious' Credit Trades At London Trading DeskQuicklink submitted by Amanda Lang Permalink
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|JPMorgan Chase has suffered big, unexpected losses at a closely watched trading desk, providing fodder to supporters of a new financial regulation the bank's CEO has loudly opposed.
The biggest U.S. bank by assets said on Thursday that it had lost $2 billion on bad bets on credit derivatives, made by a London trading desk, run by a man other traders have alternately dubbed "The London Whale" and "Voldemort." The office is intended to hedge the giant bank's credit risk, not increase it.
In a regulatory filing on Thursday, the bank said that, since the end of March, its chief investment office "has had significant mark-to-market losses in its synthetic credit portfolio, and this portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed."
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