FT.COM: …The report quotes an examiner at the Office of Comptroller of the Currency, JPMorgan’s regulator, saying he felt the bank had “lied to” and “deceived” the agency over the question of whether the bank had mismarked its books to hide the extent of losses. It also reveals that the OCC lowered its “CAMELS” measure of bank strength, a key and usually secret metric, due to concerns over management and internal “oversight deficiencies”.
The bank’s chief risk officer John Hogan told the OCC that there was no mismarking of asset valuations but the bank later acknowledged that there had been mismarking. Mr Hogan said he had not been aware of this when he gave his answer to the OCC, the report said. However, the panel said the bank mismarked to hide losses. It also criticised the OCC for insufficient oversight.
At a hearing on Friday, the panel will attempt to force JPMorgan into admitting the trades that soured were designed to increase profits, rather than to hedge various exposures. Senators including the panel’s Democratic chairman Carl Levin argue that the episode shows the need for a tough application of the so-called Volcker rule, the forthcoming US ban on proprietary trading… (more)
