JP Morgan announces 2bn dollar trading loss

Published:  11 May at 6 PM

As reported by the BBC, the largest US bank, JPMorgan Chase, has announced a shocking trading loss of, at minimum, $2 billion (£1.2 billion) on its traders' complex investments.

CEO Jamie Dimon is pointing his fingers at "sloppiness and bad judgement", warning that the situation could get worse. The hedging strategy, which is quite risky, may cost the bank another $1 billion, he added.

JPMorgan shares fell by 7 percent in after-hours trading, which other bank shares dropped as well. Bank of America, Goldman Sachs and Citigroup also suffered heavy losses on Wall Street at the end of the market day.

Shares in European lending institutions were also hit, with Barclays dropping 2.85 percent, BNP Paribas falling 2.6 percent, and Deutsche Bank 2 percent lower.

All in all, after considering for other gains, the losses seen at the chief investment office (CIO) of JPMorgan are estimated at $800 million in the second quarter.

The strategy adopted at the CIO unit, which is run by Ina Drew and Achilles Macris, had been described as more risky and less effective than previously believed, said Mr Dimon.