Is it a little to little and a little to late for J. P. Morgan to start worrying about restructuring? JP Morgan restructuring division caused $2 billion loss: Report
BIG BAD JOHN R.
2012/06/01 13:11:00
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JP Morgan Chase is spinning out the 'special investments group' from its troubled chief investment office as executives clean up the division that caused USD 2 billion trading losses," the Financial Times reported citing a source.
The overhaul is part of a broader audit of risk-taking and risk controls at the bank, the report noted.
Special investment group, which was not implicated in the CIO's trading losses, would be moved to the US bank's corporate division and prevented from seeking fresh investment opportunities, the report said.
Special investment group's unit include wireless internet provider, LightSquared, which has filed for bankruptcy protection, it added.
Matt Zames, who replaced Ina Drew as head of the CIO, has decided his division should be refocused on basic asset-liability management. Besides, Norma Corio, a 30-year veteran of the bank, would continue to run the group.
"Exotic activity including the private equity investments and the sorts of risky credit derivatives positions that caused the USD 2 billion losses, have been banned," the daily said.
Earlier this month, JP Morgan acknowledged that it had lost USD 2 billion on derivative trades.
The overhaul is part of a broader audit of risk-taking and risk controls at the bank, the report noted.
Special investment group, which was not implicated in the CIO's trading losses, would be moved to the US bank's corporate division and prevented from seeking fresh investment opportunities, the report said.
Special investment group's unit include wireless internet provider, LightSquared, which has filed for bankruptcy protection, it added.
Matt Zames, who replaced Ina Drew as head of the CIO, has decided his division should be refocused on basic asset-liability management. Besides, Norma Corio, a 30-year veteran of the bank, would continue to run the group.
"Exotic activity including the private equity investments and the sorts of risky credit derivatives positions that caused the USD 2 billion losses, have been banned," the daily said.
Earlier this month, JP Morgan acknowledged that it had lost USD 2 billion on derivative trades.
Top Opinion
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Yes it should have happened before they lost 2 billion of investors money
+3It's very simple, their action is like locking the barn door after the horse has already run away. They lost 2 Billion of investors money, they are being investigated by the Government and Know they are worried about covering their asses. Why weren't they worried more before when they made the risky investment. How could they be so lacks about their investments when the Government and US tax dollars had to bail them out before!!! Whops WTF we messed up again! http://images.businessweek.co...
People do not forget that when MF Financial stole billions overnight and to this day- still no answers, yet it is known that JPMorgan Chase assumed MF's liabilities first (why?) and 'wound up' (oh, that's just such a terrible thing) with "MF's assets." How convenient. This was said months ago, and JP never had "assets like that" until assuming MF's liabilities.
A very fine web spun of Jon Corzine, Mario Monti, et al.
It's disgusting.
BINGO! THAT is why Glass-Steagall shoudl be reinacted!