'JPMorgan ignored risks, fought regulators'
WASHINGTON: JPMorgan Chase & Co ignored risks, misled investors, fought with regulators and tried to work around rules as it dealt with mushrooming losses in a derivatives portfolio, a Senate report alleged in a damning review of the largest US bank's management.
Senior managers at the bank were told for months about the bad derivatives bets that ended up costing the bank more than US$6.2 billion (RM19.34 billion), but did little to rein them in, according to the Permanent Subcommittee on Investigations report on Thursday.
The Senate report came on the same day the US Federal Reserve separately asked JPMorgan to improve its capital planning process as part of an annual "stress tests" of banks.
In particular, the 301-page Senate report will likely give new energy to regulators crafting the Volcker rule, which proposes to put limits on banks betting with their own funds.
Meanwhile, the Federal Reserve has told Goldman Sachs Group Inc and JPMorgan that they must fix flaws in how they determine capital payouts to shareholders.
The Fed said JPMorgan and Goldman would have to submit new plans by the end of the third quarter.
A senior central bank official declined to identify specific problems. Reuters