JPMorgan Was Warned About Lax Risk Controls
Source: NY Times
A small group of shareholder advocates delivered an urgent message to top executives at JPMorgan Chase more than a year ago: the bank’s risk controls needed to be improved.
JPMorgan officials dismissed the warning from the CtW Investment Group, the advocates, who also cautioned bank officials that the company had fallen behind the risk-management practices of its peers.
Now, after disclosing a $2 billion trading loss at JPMorgan in May and watching the bank’s market value drop by more than $25 billion, those officials are expected to follow one of the group’s recommendations, strengthening the board panel that oversees risk.
Still, that will not address weaknesses that critics say undermined the power of the bank’s chief risk officer. According to two former traders at the chief investment office and outside specialists, the chief risk officer was not focused on the huge credit market bets the chief investment office made that eventually went bad.
Read more: http://www.nytimes.com/2012/06/04/business/jpmorgan-ignored-warning-on-risk-control.html?pagewanted=all
