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JPMorgan had 'inadequate' risk controls, regulators say

The new Volcker rule, which forces banks to better monitor their risks, may help avoid issues such as JPMorgan's catastropic $2 billion-plus loss.

By Marcy Gordon | Updated on June 07, 2012

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.

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