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JP Morgan must tighten risk controls, say US regulators | JP Morgan must tighten risk controls, say US regulators |
(about 1 hour later) | |
JP Morgan Chase, which lost billions of dollars in trades by an employee known as the London Whale, must revamp its risk management, regulators have said. | JP Morgan Chase, which lost billions of dollars in trades by an employee known as the London Whale, must revamp its risk management, regulators have said. |
The bank was told to examine how it pays top executives, and how they are rewarded for taking on risk. | The bank was told to examine how it pays top executives, and how they are rewarded for taking on risk. |
JP Morgan and its board agreed to submit a plan within 60 days. | JP Morgan and its board agreed to submit a plan within 60 days. |
However, the US Federal Reserve and the Office of the Comptroller of the Currency stopped short of apportioning blame or fines for the trading errors. | However, the US Federal Reserve and the Office of the Comptroller of the Currency stopped short of apportioning blame or fines for the trading errors. |
Stricter controls | |
In April, reports emerged of a London-based trader, Bruno Iksil who was called the London Whale because the positions he took were big enough to move markets. | |
This is the first regulatory action since the bank revealed it had lost $6.2bn (£3.8bn) in those derivatives trades. | |
Regulators asked the bank to tighten internal controls, risk management and oversight from the board. | Regulators asked the bank to tighten internal controls, risk management and oversight from the board. |
JP Morgan said it "has been working hard to fully remediate the issues". | JP Morgan said it "has been working hard to fully remediate the issues". |
The bank's own report into the incident is due to be published this week when JP Morgan announces its fourth-quarter earnings. | The bank's own report into the incident is due to be published this week when JP Morgan announces its fourth-quarter earnings. |
JP Morgan still faces investigations by the US Department of Justice, the Securities and Exchange Commission as well as the UK Financial Services Authority among others. | |
Money laundering | |
In a separate case the OCC and the Federal Reserve also criticised the bank for lapses in its anti-money laundering rules. | |
It comes after JP Morgan reached a settlement of $88m with the US Treasury Department in 2011, in a case of violating US sanctions. | |
The accusations centred around wire transfers processed by JP Morgan to Cuba and Sudan, as well trade loans with Iran. | |
JP Morgan said it had made progress addressing the issues. |
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