According to gulfnews.com Jamie Dimon was right about one
thing: The embarrassing $3-billion-and-counting (Dh11 billion) trading loss at
JPMorgan Chase has played right into the hands of pundits who think Wall Street
needs to be put on a shorter leash.
Honestly, we pundits probably couldn't have made up a better
story than this one: A low-profile trading operation charged with hedging risk
and safely investing excess cash winds up doing just the opposite, along the
way earning a quarter of the bank's annual profits — and a $15 million pay
package for its chief. A cocky London derivatives trader known variously as
Voldemort and the London Whale who overplays his hand and finds himself
squeezed by a couple of hedge fund sharks who pocket tens of millions of
dollars profiting from his miscalculation.
Risk management models that were flawed and risk managers
who were ignored. Press warnings that were dismissed as a "tempest in a
teapot" by a celebrity chief executive who seems to have been unaware of
the risk in a $100 billion trading position. And all of it going on right there
under the noses of resident bank examiners desperate to show they won't let it
happen again. So much for the idea that the greatest threat to the financial
system is overzealous government regulation....
Find out more at http://gulfnews.com/business/opinion/us-banks-soap-opera-shows-a-detachment-from-reality-1.1025949
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