The US Secretary of the Treasury Timothy Geithner said JP Morgan's $2 billion trading loss - that led to chief investment officer at the firm, Ina Drew, to resign yesterday - was a result of mismanagement and strengthens the case for Wall Street reforms.
Mr Geithner added he had not spoken to JP Morgan chief Jamie Dimon since the loss was reported but that the US Treasury would participate in a close look at the incident.
JP Morgan's $2 billion trading losses - which led to chief investment officer Ina Drew reitiring today - affirm the need for Wall Street reform, the White House said.
– White House spokesman Jay CarneyThis event only reinforces why it was so important to pass Wall Street reform, why it is so important to fully implement Wall Street reform.
He said President Barack Obama "fought very hard against Republicans and Wall Street lobbyists" to increase oversight of US banks after the financial crisis and said it was critical to keep the laws from being watered down.
JP Morgan Chase have announced that chief investment officer Ina Drew has decided to retire, the first high-ranking executive to depart the firm after the disclosure of a $2 billion trading loss, according to MarketWatch.
Saturday's newspapers have revealed details of the man thought to be responsible for the massive loss at JP Morgan which has sent shockwaves through the city.The Guardian has named him as Bruno Iksil, thought to be one of the highest-paid bankers in London.
Married with four children, he spends Monday to Thursday in London, staying in a flat in Earls Court, returning to France on Fridays. A graduate in engineering from the École Centrale in Paris 20 years ago, Iksil had become well known in the opaque $10tn market for credit default swaps.
The Mail, The Sun and The Mirror point out that he had earned the nickname of the "London Whale" and also Voldemort, after Harry Potter's nemesis.
The Telegraph reports the firms' bosses were told the loss was an accident waiting to happen.
The share price of America's biggest bank tumbled today, after overnight revelations that a team of its traders lost more than a billion pounds.
The Chief Executive of JP Morgan said errors, sloppiness and bad judgement were to blame.
Romily Weeks explains:
JP Morgan's $2 billion trading loss has had a negative knock-on effect on a number of other banks. After the bank made the announcement their shares fell by 7%. Other banks also experienced falls in their shares:
Analysts say the lack of details of how exactly the bank made the colossal loss over six weeks is adding to market jitters.
JP Morgan chief executive James Dimon arranged a conference call with analysts and investors to explain how the bank managed to lose $2 billion in a six week period of ill-fated risky investments.
– Jamie Dimon, JP Morgan chief executiveThe portfolio has proved to be riskier, more volatile and less effective as an economic hedge than we thought. There were many errors, sloppiness and bad judgement.
He admitted the bank's strategy was "flawed, complex, poorly reviewed, poorly executed and poorly monitored" but stressed that the bank remains profitably despite the huge loss.
JP Morgan's stock plunged 7% in after-hours trading following the announcement that it lost $2 billion dollars in the past six weeks.
The loss came from a trader known in bond markets as the 'London whale" who was reported to be making trades worth up to 10 trillion dollars in April.
America's largest bank has revealed it has lost $2 billion dollars (£1.24 billion) in the past six weeks through a series of blunders at the bank's Chief Investment Office (CIO) in London.
The bank's London office is responsible for managing risk for the New York company.
Partly because of the loss, JPMorgan said it expected an overall loss of $800 million dollars (£497m) this quarter from the Chief Investment Office segment of the business.