“JPmorgan Chase & Co. (JPM), whose trading loss of more than $6.2 billion last year was fueled by the adoption of a formula that understated risks, has adopted yet another model.

“JPMorgan said today it employed a new formula to judge the risk of its credit derivatives position, at least the fourth such model it’s used since January 2012. The portfolio was built by Bruno Iksil, known as the London Whale because his bets were so big they moved markets.

“The bank changed its measurement of value at risk, or VaR, for the credit derivatives book in the first quarter of this year “to achieve consistency with like products” within the corporate and investment bank, JPMorgan said today in a supplement. “This change had an insignificant impact” to average VaR for fixed income and the investment bank’s trading and credit portfolio, the New York-based bank said.

“JPMorgan had previously changed the VaR model, which estimates the most amount of money a trading position can lose on 95 percent of the trading days, when the corporate and investment bank took over most of the credit book from the chief investment office last year. That change last year reduced JPMorgan’s estimated risk by 24 percent to $115 million in the third quarter.”

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