(Newser)
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JPMorgan Chase has stunned the financial world by disclosing trading losses of $2 billion since the beginning of April, caused by what CEO Jamie Dimon calls "errors," "sloppiness" and "bad judgment." The losses came from bad trades made by a unit that was supposed to help America's biggest bank hedge against risk. A single trader, nicknamed the "London whale," made huge bets in the derivatives market that backfired, the Los Angeles Times reports. The bank says it could lose another $1 billion from the portfolio in the next quarter.
"These were egregious mistakes," says Dimon, who admits that the huge loss will probably lead to calls for greater banking regulation. "We have egg on our face, and we deserve any criticism we get." Asked if other banks would have similar problems, Dimon said: "Just because we were stupid, doesn’t mean anyone else was," but the market is reacting differently, notes the Wall Street Journal. JPMorgan shares sank more than 6% in after-hours trading, and Citigroup, Goldman, BofA, and Morgan Stanley all fell more than 2%.
