JPMorgan Chase Agrees To Beef Up Risk Management
RENEE MONTAGNE, HOST:
Federal regulators have ordered JPMorgan Chase to beef up its risk management and auditing procedures. That order comes in response to losses suffered by a group of London-based traders at the bank - losses totaling $6 billion.
NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: Last May, JPMorgan Chase acknowledged that it had lost billions of dollars in a hedging strategy gone awry - and that senior executives had been unaware of what was happening. JPMorgan Chase is one of the biggest and most respected banks on Wall Street and the revelation underscored the systemic threat posed by such losses to the economy as a whole.
Yesterday, the Federal Reserve and the Office of the Comptroller of the Currency ordered the bank to improve its risk controls. They also said the bank had to correct deficiencies in the way it combats money laundering. But the bank received no fines or other penalties.
Michael Greenberger is a professor at the University of Maryland Law School.
MICHAEL GREENBERGER: It's a step in the right direction. But overall I think there are many - and I include myself - who watch these markets, who believe these banks are getting away with what amounts to traffic tickets to the rest of us.
ZARROLI: The bank agreed to comply with the orders but admitted no wrongdoing. A committee set up by JPMorgan Chase's board is supposed to present a report today on how last year's losses occurred but the board hasn't decided whether it will be released to the public. It is also deciding whether to reduce the bonuses of CEO Jamie Dimon and other top executives.
Jim Zarroli, NPR, New York. Transcript provided by NPR, Copyright NPR.