The 2012 JPMorgan Chase trading loss
What is the 2012 JPMorgan Chase trading loss?
The 2012 JPMorgan Chase trading loss was a $6 billion-plus debacle arising out of the London office of the banking giant, centred on the trader who would become known as the 'London Whale'. The trading involved complex derivatives.
Where have you heard about the 2012 JPMorgan Chase trading loss?
As an investor, you may have become aware of the 2012 JPMorgan Chase trading loss in the context of concerns that it proved that major banks were still engaging in some of the high-risk activities that had helped to trigger the 2008 financial crisis.
What you need to know about the 2012 JPMorgan Chase trading loss.
The 'London Whale' was a trader called Bruno Iksil, who worked in the London part of the bank's chief investment office, a unit that was supposed to be controlling JPMorgan Chase's level of risk. Instead, the office became a profit centre, with Iksil and his colleagues using $350 billion of bank funds to make derivative trades. Initially these were profitable, but in the early part of 2012 the bank decided to offset some of its risks by hedging its bets. When this went wrong, the loss came to light. JPMorgan Chase faced civil costs and regulatory sanctions, but there were no criminal charges in connection with the actual trading.