Reports: JPMorgan's Losses Could Top $4 Billion; Three Execs To Resign | WAMU 88.5 - American University Radio

NPR : News

Filed Under:

    Reports: JPMorgan's Losses Could Top $4 Billion; Three Execs To Resign

    Three high-ranking executives, including one of the most powerful women on Wall Street, are expected to resign from JPMorgan Chase this week because of their roles in the $2.3 billion loss the bank recently suffered when some risky trades blew up in its face.

    The Wall Street Journal, which broke that news, also reports that JPMorgan's losses from the "giant trading blunder" keep growing. It cites "people familiar with the situation," as its sources.

    According to the Journal:

    "As of last Thursday the bank had lost $2.3 billion on a credit derivatives trade gone awry, but that figure grew by about $150 million on Friday, according to a person familiar with the matter. Executives are prepared for another $1 billion of possible losses this quarter from these positions, as well as another $1 billion of potential losses over the next year or so, according to someone close to the matter. That would mean a possible total loss of more than $4 billion, though the positions also could rebound in value, slicing any loss, the person noted."

    So far, at least, the losses have still not been large enough to overtake profits from the bank's other operations.

    But as concern about the size of the bank's losses and whether similar problems might occur at other financial institutions, The Associated Press says that "the bank will accept the resignation of Ina Drew, its chief investment officer," according to "a person familiar with the matter." The Journal adds that "Achilles Macris, who was in charge of the London-based operation that placed the questionable trades, and trader Javier Martin-Artajo" are also expected to depart.

    Bloomberg News reports that "Drew, 55, is one of two women on the operating committee at JPMorgan, the biggest and most profitable U.S. bank. Her office oversees about $360 billion, the difference between money from deposits and what the bank lends. [Chief Executive Jamie] Dimon had encouraged her unit to boost earnings by buying higher-yielding assets, including structured credit, equities and derivatives, in an expansion of risk-taking led by Achilles Macris, ex-employees said in April."

    Bloomberg also says that "the entire London staff" from JPMorgan's chief investment office — a few dozen people — "is at risk of dismissal."

    As we reported Friday, in announcing the loss on Friday, Dimon said it was "a bad strategy ... badly executed."

    Update at 9:15 a.m. ET. Drew's Retirement Announced: According to the AP, "JPMorgan Chase says its chief investment officer [Ina Drew] is retiring."

    Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

    NPR

    This Weekend, Investigate The 'Edges' Of Fred Moten's Musical Poetry

    In honor of National Poetry Month, our latest Weekend Read is Fred Moten's collection The Little Edges. Poet Douglas Kearney says Moten's power is in his attention to music, both in text and subject.
    NPR

    In This Museum, Visitors Can Eat The Exhibits

    The Southern Museum of Food and Beverage in New Orleans chronicles the eats and drinks of the Southern states. And it may be one of the only museums where visitors can imbibe while viewing exhibits.
    NPR

    Staten Island Candidates Avoid Talk Of Eric Garner Case

    In the New York Congressional district where an an unarmed black man died at the hands of police last year, neither candidate for a special congressional election is using the death to score points.
    NPR

    As Health Apps Hop On The Apple Watch, Privacy Will Be Key

    The notion of receiving nutrition advice from artificial intelligence on your wrist may seem like science fiction. But health developers are betting this kind of behavior will become the norm.

    Leave a Comment

    Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.