WASHINGTON (AP)—JPMorgan Chase had weak controls in place to contain risk in its investment division that suffered a $2 billion-plus trading loss, a key federal regulator said Wednesday.
U.S. Comptroller of the Currency Thomas Curry told the Senate Banking Committee that the nation's largest bank began reducing the amount of hedging it was doing to minimize potential losses at the end of 2011. Curry's agency is examining JPMorgan's risk-containment policies in the weeks before it suffered the trading loss.
"Inadequate risk management" was the problem, said Curry, during the two-hour hearing that touched heavily on the bank's trading loss. Curry said his agency is conducting an extensive review that "will focus on where breakdowns or failures occurred."
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