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May 11, 2012

JPMorgan Chase Admits Big Losses On 'Egregious" Credit Trades

“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.”

“And the bank is already getting plenty of criticism. In an email to the Huffington Post, Dennis Kelleher, president of the financial-reform advocacy group Better Markets, said the bank’s admission ‘shows the need for financial reform, especially a strong Volcker Rule, to limit such risky betting.’ “

” ‘Jamie Dimon and JP Morgan Chase just proved what anyone not getting a paycheck from a Wall Street bank already knows: gigantic too-big-to-fail banks are too-big-to-manage,’ he added. ‘They must not be allowed to continue to threaten our financial system and our economy.’ “

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Read full Huffington Post article here.

 
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