Fin 435

Topics: Bank, Credit default swap, Credit risk Pages: 3 (754 words) Published: August 26, 2013
Group Name: Blue Ocean. Md. Rabiul Islam 1020150030. Nafeez Mahmud 1020106030. Zarin Tasnim Arshi 1020049030. Muntasir Shams Nehal 1010586030 Topic: Reasons for JPMorgan Chase & Co.’s 2billion USD trading loss.

J.P. Morgan is one of the world's leading global investment banks, with the client from corporations, governments, states, municipalities, healthcare organizations, educational institutions, banks and investors sector around the world. It is also well known for providing Securities Services, Asset Management, Commercial Banking, Private Banking and treasury services. These different financial services are offered to their customers maintaining an ethical standard as well as having employee commitment in the workplace. It is such kind of financial service provided that is committed to optimize efficiency, mitigate risk and enhance revenue with is valued assets.

Despite of being such a reputed company for such a long time the in May 2012 they incurred loss of 2billion USD in the first quarter. Besides these, they are also assuming that this loss with increase by another $1billion in the second quarter. After incurring the loss their share piece falls by 7% a day. They fall down from Credit Rating (AA-). They lose the market and customer’s satisfaction. Few institutes are investigating on such loss in the financial market. The U.S. Security Exchange Commission is having a preliminary investigation into JPMorgan’s accounting practices and public disclosures about the trading loss. Besides these the U.K.’s Financial Services Authority examined the role London employees played in the loss. In the end, one of the executive of the bank claimed that the loss was originated from the firm’s Chief Investment Office (CIO).

The Wall Street Journal reports a trader at J.P. Morgan known in the market as the 'London Whale' made large bets on credit derivatives. Iksil used a little-known index of 125 firms – CDX IG 9, which included the Campbell Soup Company...
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