Days after disclosing a $2 billion trading loss at JPMorgan Chase, the bank’s chief executive, Jamie Dimon, admitted that “we made a terrible egregious mistake” in an interview Sunday on NBC’s “Meet the Press.”
“There’s almost no excuse for it,” Mr. Dimon said about the trading loss that stemmed from a soured bet on creditderivatives made by the bank’s chief investment office in London.
The trading, which was intended to protect the bank from financial risk, turned bad.
The bank was “sloppy” and “stupid,” Mr. Dimon said.
His interview with NBC’s David Gregory was supposed to be an amiable weekend chat about JPMorgan’s Global Cities Initiative, a five-year economic growth project that the company has been working on. And Mr. Dimon had taped an interview on Wednesday about the project with NBC, without disclosing the trading losses even though he knew about them. On Friday, he sat for a second interview to discuss the losses, apologizing to Mr. Gregory.
Questions rose last month about the bank’s activities amid reports that a trading unit in London was taking outsized positions to hedge against risk that they were distorting the market.
In April, Mr. Dimon, who prides himself on having a finger on the pulse of risk at the bank, dismissed concerns about the trading. In a conference call with analysts on April 13, Mr. Dimon called the worries “a complete tempest in a teapot.”
On Sunday, Mr. Dimon backed away from that confident position. “We were dead wrong” to dismiss the concerns, Mr. Dimon told Mr. Gregory.
Usually a fierce critic of federal regulators meddling with banks, Mr. Dimon said Sunday that the bank would be open to inquiries from regulations.
The interview marked a stark contrast in Mr. Dimon’s earlier position. Even after the full extent of the loss was revealed Thursday on a hastily organized conference call, Mr. Dimon would not admit that the losses called for a stronger regulatory framework. Instead, he defended the trading unit, saying that it had “done a great job for a long extended period of time.”
In the interview aired Sunday, Mr. Dimon said the losses would provide ammunition for regulators to tighten restrictions on banks.
“This is a very unfortunate and inopportune time,” for the trading losses, he said.
The $2 billion loss came from a complicated trading strategy that involved derivatives, financial instruments that derive their value from the prices of securities and other assets. The strategy was erected to defray any potential losses on the bank’s large holdings of bonds and loans, but it backfired and instead of hedging against losses, the trades produced losses of its own.
Mr. Dimon said Sunday that he would support the government’s authority to unwind a failing bank, even if it meant wiping out shareholder equity. But, he emphasized that JPMorgan was “very strong.”
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