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Execs lose jobs over blunder

Execs lose jobs over blunder

(15 May 2012 – United States) Three executives at JPMorgan Chase, the largest bank in the United States, are expected to leave their jobs this week after a US$2 billion (A$1.99 billion) trading blunder, The Wall Street Journal reported. The Journal, citing people familiar with the situation, reported that one of the executives is Ina Drew, who for seven years has run the risk-management division at the bank responsible for the loss.

The US$2 billion loss, disclosed last Thursday by chief executive Jamie Dimon, has been an embarrassment for the bank and led lawmakers and critics of the banking industry to call for tougher regulation of Wall Street.

On Friday, investors shaved almost 10 percent off JPMorgan's stock price. Dimon said in a TV interview aired Sunday that he was 'dead wrong' when he dismissed concerns about the bank's trading last month.

'We made a terrible, egregious mistake,' Dimon said in the interview that was taped on Friday and aired on NBC's Meet the Press. 'There's almost no excuse for it.'

Dimon said he did not know the extent of the problem when he said in April that the concerns were a 'tempest in a teapot'.

The loss came in the past six weeks. Dimon has said it came from trading in so-called credit derivatives and was designed to hedge against financial risk, not to make a profit for the bank.

Dimon said the bank is open to inquiries from regulators. He has also promised, in an email to the bank's employees and in a conference call with stock analysts, to get to the bottom of what happened and learn from the mistake.
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