Jpmorgan Chase & Co.'s 2billion USD Trading Loss
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 …show more content…
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 …show more content…
Morgan says his unit is meant to 'hedge structural risks’. The failed hedge likely involved a bet on the flattening of a credit derivative curve, part of the CDX family of investment grade credit indices, said two sources with knowledge of the industry, but not directly involved in the matter. JPMorgan was then caught by sharp moves at the long end of the bet, [it] said. The CDX index gives traders exposure to credit risk across a range of assets, and gets its value from a basket of individual credit derivatives. In essence, JPMorgan made a series of bets which turned out very, very badly.
Banks’ greatest exposure to losses usually comes from old-fashioned lending, not “proprietary trading”, using their own cash to take bets on financial markets. The 2007-09 financial crisis originated in the deterioration of traditional home mortgage lending, as opposed to banks’ short-term trading of exotic financial instruments for profit. Proprietary trading has a bad image because it’s so easily likened to gambling.
The JPMorgan trading losses come at a difficult time for the international banking system as it faces up to risks linked to the Eurozone debt crisis and international economic
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 …show more content…
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 …show more content…
Morgan says his unit is meant to 'hedge structural risks’. The failed hedge likely involved a bet on the flattening of a credit derivative curve, part of the CDX family of investment grade credit indices, said two sources with knowledge of the industry, but not directly involved in the matter. JPMorgan was then caught by sharp moves at the long end of the bet, [it] said. The CDX index gives traders exposure to credit risk across a range of assets, and gets its value from a basket of individual credit derivatives. In essence, JPMorgan made a series of bets which turned out very, very badly.
Banks’ greatest exposure to losses usually comes from old-fashioned lending, not “proprietary trading”, using their own cash to take bets on financial markets. The 2007-09 financial crisis originated in the deterioration of traditional home mortgage lending, as opposed to banks’ short-term trading of exotic financial instruments for profit. Proprietary trading has a bad image because it’s so easily likened to gambling.
The JPMorgan trading losses come at a difficult time for the international banking system as it faces up to risks linked to the Eurozone debt crisis and international economic