Tags: US | JPMorgan | Loss

Report: 3 JPMorgan Executives to Resign

Sunday, 13 May 2012 05:47 PM

 

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Three executives at JPMorgan Chase, the largest bank in the United States, are expected to leave their jobs this week after a $2 billion trading blunder, The Wall Street Journal reported Sunday.

The Journal, citing people familiar with the situation, reported that one of the executives is Ina Drew, who for seven years has run the risk-management division at the bank responsible for the loss.

A JPMorgan spokeswoman did not immediately return a request for comment from The Associated Press.

Earlier Sunday, NBC aired an interview in which JPMorgan CEO Jamie Dimon said that he was "dead wrong" when he dismissed concerns about the bank's trading last month.

Dimon said he did not know the extent of the problem when he said in April that the concerns were a "tempest in a teapot." After the bank reported the trading loss, investors shaved almost 10 percent off the bank's stock price.

"We made a terrible, egregious mistake," Dimon said in an interview that was taped Friday and aired on NBC's "Meet the Press." ''There's almost no excuse for it."

The $2 billion loss came in the past six weeks. Dimon has said it came from trading in so-called credit derivatives and was designed to hedge against financial risk, not to make a profit for the bank.

Dimon said the bank is open to inquiries from regulators. He has also promised, in an email to the bank's employees and in a conference call with stock analysts, to get to the bottom of what happened and learn from the mistake.

Dimon told NBC that he supported giving the government the authority to dismantle a failing big bank and wipe out shareholder equity. But he stressed that JPMorgan, the largest bank in the United States, is "very strong."

Lawmakers and critics of the banking industry have seized on the $2 billion loss to say that banks still take too much risk more than three years after the financial crisis.

A piece of the financial regulation known as the Volcker rule would prevent banks from certain kinds of trading for their own profit. Dimon has said the trading involved in the $2 billion loss would not have fallen under the rule.

Rep. Barney Frank, D-Mass., told ABC's "This Week" that he hopes the final version of the Volcker rule will prevent the type of trading that led to the massive loss at JPMorgan.

Dimon conceded to NBC that the bank "hurt ourselves and our credibility" and expects to "pay the price for that." Asked what the price should be, Sen. Carl Levin, D-Mich., said that banks will lose their fight to weaken the rule.

"This was not a risk-reducing activity that they engaged in. This increased their risk," Levin told NBC.

"So we've got to be very, very careful that the regulators here are not undermined by this huge effort to weaken the rule by putting in a huge loophole" that includes the trading involved in the JPMorgan loss, he said.

Addressing public anger toward Wall Street, Dimon said he wants a more equitable society and does not mind paying higher taxes. But he said attacking all of business is "very counterproductive."

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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