JPMorgan Chase (JPM) prided itself on having the best risk-management practices in the financial industry, having survived the 2007-09 financial crisis in better shape than many competitors. Chief Executive Officer Jamie Dimon often spoke of the bank’s “fortress balance sheet.” A keen focus on risk management is vital to JPM’s longevity, as is the case with all highly leveraged financial institutions. However, the JPM Task Force that investigated the $6 billion 2012 London Whale trading loss concluded that risk-management practices at the bank’s Chief Investment Office (CIO), the unit in which the loss occurred, were given less scrutiny by senior management than those of the bank’s client-facing businesses, despite the fact that the Chief Investment Office managed $350 billion in assets, an amount almost double JPM’s total stockholders’ equity at December 31, 2011.
Zeissler, Arwin G. and Metrick, Andrew
"JPMorgan Chase London Whale D: Risk-Management Practices,"
Journal of Financial Crises: Vol. 1
Iss. 2, 92-102.
Available at: https://elischolar.library.yale.edu/journal-of-financial-crises/vol1/iss2/5
Accounting Commons, Business Administration, Management, and Operations Commons, Business Law, Public Responsibility, and Ethics Commons, Business Organizations Law Commons, Corporate Finance Commons, Finance Commons, Organizational Behavior and Theory Commons, Policy History, Theory, and Methods Commons, Work, Economy and Organizations Commons