WALL STREET JOURNAL: Some top J.P. Morgan Chase JPM -2.55%& Co. executives and directors were alerted to risky practices by a team of London-based traders two years before that group’s botched bets cost the bank more than $2 billion, according to people familiar with the situation.
Interviews with more than a dozen current and former members of the bank’s Chief Investment Office, the unit responsible for the losses, indicate that discussions about reining in London traders started as early as 2010. Certain directors were briefed then on a foreign-exchange-options bet that went bad, and were told that the trader responsible wouldn’t be allowed to go overboard in the future, one of these people said…
The concerns dating back to 2010 show that J.P. Morgan had an opportunity to avoid the bungled trades, which over time could cost the bank as much as $5 billion… (more)
EDITOR: When banks that are considered “too large to fail” such as J. P. Morgan go broke, it is the taxpayers who end up having to bail them out, even though the process by the Federal Reserve is for the most part hidden from sight.
