JPMorgan Chase has reported a $2bn trading loss in the past six weeks after a London-based trader placed a number of trades which hedge funds were betting against.
The Wall Street Journal reported last month that the trader, French-born Bruno Michel Iksil, nicknamed the ‘London Whale’, had created a large position in the likes of credit default swaps, which hedge funds were now taking advantage of.
JPMorgan Chase chief executive Jamie Dimon revealed the loss yesterday and said that it could get worse and that the bank “deserves any criticism it gets”.
In a call arranged last night in New York, Dimon said that the set of trades was designed to shield the bank from risk in the financial markets.
“In hindsight, it was bad strategy, bad execution,” he said.
Shares in JPMorgan fell by 5 per cent wiping $10bn off the company’s value.