JPMorgan Chase
Introduction
J.P. Morgan Chase & Co. is a prominent and successful Fortune 500 company. It is the largest bank in the United States by assets. CEO James Dimon, has lead the J.P. Morgan Chase & Co. through multiple risky events. J.P. Morgan Chase & Co. has been facing multiple fines and settlements due to its failure to abide by its own code of conduct. The company has failed to follow procedures and regulations on numerous occasions. The company is becoming notorious for making unethical decisions and simply not following the guidelines. This year J.P. Morgan Chase & Co. agreed on a thirteen-billion dollar settlement regarding unethical selling of mortgage-backed securities.
The selling of these mortgage-backed securities played a role in causing the financial crisis of 2008. An article found on BBC’s website does a good job of explaining this in basic simple terms. Between 2004 and 2006 US interest rates rose from 1% to 5.35%, triggering a slowdown in the US housing market. Homeowners, many of whom could only barely afford their mortgage payments when interest rates were low, began to default on their mortgages. Default rates on sub-prime loans - high risk loans to clients with poor or no credit histories - rose to record levels. The impact of these defaults were felt across the financial system as many of the mortgages had been bundled up and sold on to banks and investors (http://news.bbc.co.uk/).
This report explains and elaborates on J.P. Morgan Chase & Co.’s role in the financial crisis. It expounds on what the company violated and unethically did to have caused the current settlement negotiation. Using multiple online resources, we gathered information plentiful enough to analyze the company’s practices and determine what steps must be taken to avoid future discrepancies. Through social media we observed how consumers’ feelings towards the company are being impacted by the current tentative settlement regarding the mortgage-backed securities. The
J.P. Morgan Chase & Co. is a prominent and successful Fortune 500 company. It is the largest bank in the United States by assets. CEO James Dimon, has lead the J.P. Morgan Chase & Co. through multiple risky events. J.P. Morgan Chase & Co. has been facing multiple fines and settlements due to its failure to abide by its own code of conduct. The company has failed to follow procedures and regulations on numerous occasions. The company is becoming notorious for making unethical decisions and simply not following the guidelines. This year J.P. Morgan Chase & Co. agreed on a thirteen-billion dollar settlement regarding unethical selling of mortgage-backed securities.
The selling of these mortgage-backed securities played a role in causing the financial crisis of 2008. An article found on BBC’s website does a good job of explaining this in basic simple terms. Between 2004 and 2006 US interest rates rose from 1% to 5.35%, triggering a slowdown in the US housing market. Homeowners, many of whom could only barely afford their mortgage payments when interest rates were low, began to default on their mortgages. Default rates on sub-prime loans - high risk loans to clients with poor or no credit histories - rose to record levels. The impact of these defaults were felt across the financial system as many of the mortgages had been bundled up and sold on to banks and investors (http://news.bbc.co.uk/).
This report explains and elaborates on J.P. Morgan Chase & Co.’s role in the financial crisis. It expounds on what the company violated and unethically did to have caused the current settlement negotiation. Using multiple online resources, we gathered information plentiful enough to analyze the company’s practices and determine what steps must be taken to avoid future discrepancies. Through social media we observed how consumers’ feelings towards the company are being impacted by the current tentative settlement regarding the mortgage-backed securities. The