JPMorgan Chief Executive Jamie Dimon apologized for the bank’s recent multibillion-dollar trading loss Wednesday, telling lawmakers it occurred because poorly managed traders embarked on a misguided hedging strategy they did not fully understand.
He defended the intent of the traders, telling the Senate Banking Committee it was a genuine hedge that would have made the bank a lot of money if a credit crisis hit. He said the bank’s senior management failed to police the London office behind the trades.
"We became complacent," Dimon told. "Never, ever get complacent."
Dimon first flagged the trading losses last month, when he announced on a surprise May 10 conference call that a hedging strategy by the bank’s Chief Investment Office (CIO) in London had gone awry and produced at least $2 billion in unexpected trading losses.
The shocking admission, from a bank previously praised for its ability to manage risks that have felled its competitors, has also prompted questions about whether regulators can adequately oversee a bank as large as JPMorgan.
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