Tags: gross | jpmorgan | banks | dimon

Pimco's Gross: JPMorgan Still 'One of the Best-Run Banks'

Friday, 11 May 2012 12:41 PM

JPMorgan Chase is one of the “best-run banks in the world” despite a $2 billion trading loss grabbing headlines, says Bill Gross, founder of Pimco, owner of the world's largest bond fund.

"It’s got $120 billion of Tier-1 capital," Gross tells CNBC. "That’s 10.5 percent, which is higher than the 9-percent U.S. average."

JPMorgan caught markets off guard by announcing the loss, the result of a hedging strategy gone wrong.

The big bank came through the financial collapse largely unscathed, and CEO Jamie Dimon is one of the few still running a large financial institution since the downturn.

"It’s a well-run bank and decently capitalized bank" Gross says. "I think we should ask the question and you have — should banks in general should be doing these types of trades?"

Gross tells CNBC he does support Basel III regulations that would increase the level of bank equity and bank capital.

"What Pimco trusts is capital — the more capital the better and the less risk," Gross says.

Calls for increased regulation and scrutiny among hit the wire right after news broke of the trading loss.

"The enormous loss JPMorgan announced today is just the latest evidence that what banks call 'hedges' are often risky bets that so-called 'too big to fail' banks have no business making," says Senator Carl Levin, a Michigan Democrat, according to the New York Times.

"Today’s announcement is a stark reminder of the need for regulators to establish tough, effective standards."

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Friday, 11 May 2012 12:41 PM
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