JP Morgan’s $9 Billion Oops

Jun 28 2012 @ 6:56pm

A month ago, the Dish assessed the news that the investment bank had lost $2 billion on a bad bet. Turns out that news was off by about 450%. Yves Smith demands accountability:

So again, what did [JP Morgan boss Jamie] Dimon know when? Under the hot lights at the House Financial Services Committee, he repeatedly brushed off the losses on the failed Chief Investment Office trades as no biggie. Let us remind readers that the size of the CIO’s balance sheet would make it the 8th largest bank in the US and it was running half of JPM’s total risk exposures, so it’s hard to see the failure of oversight as something to be waived off. And now it turns out the losses are going to clock in at a much higher number than the $2 billion that Dimon kept repeating in the hearings.

Yglesias wonders what the government can do if this happens again, only worse:

If JP Morgan finds a way to lose $90 billion in a crazy trade, do we have the tools in place to unwind the firm or are taxpayers going to end up writing Jamie Dimon a check for $90 billion?