Derivative Scandal: Tax Payer Supported Gambling JP Morgans CDS trades, 2012
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Get it written →In 2012, JP Morgan incurred a trading loss of approximately $2 billion based on series of derivative transactions in credit default swaps (CDSs) reportedly entered as part of a hedging strategy. After later recalculation, the losses were updated to a figure closer to $6-7 billion. After the fact, JP Morgans CEO Jamie Dimon characterized the trading strategy as flawed, complex, poorly reviewed, and poorly monitored. Could JP Morgan prevent or reduce these billions of dollars of losses? How? Did the executive management do their job? This is only four years after the 2008 credit crisis. Did large banks learn any lessons from 2008?
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