JPMorgan chief vows to fix troubles

Trading loss, lax controls linger

Jamie Dimon said the bank will aim for “more open and transparent” contact with bank examiners and federal agencies.
Jamie Dimon said the bank will aim for “more open and transparent” contact with bank examiners and federal agencies.

NEW YORK — As the price tag swells for JPMorgan Chase’s multibillion-dollar trading loss, Jamie Dimon, the bank’s chief executive, offered an unvarnished message to employees Tuesday.

JPMorgan, which is poised to pay roughly $800 million to a host of government agencies, is working to “face our issues, roll our sleeves, and fix” the compliance and control problems throughout the bank, Dimon said in a companywide memo.

The brewing regulatory problems and the ensuing fallout were on display Monday when JPMorgan agreed to settle investigations from government agencies in Washington and London into the bank’s $6 billion blunder by traders in London. As part of the settlement, it will make a sweeping admission of wrongdoing.


As he works to shore up lax controls and root out lingering problems, Dimon explained how “we are aggressively tackling these challenges.” Dimon explained the contours of that strategy in his memo, including how the bank “deployed massive new resources and refocused critical managerial time” on the effort.

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A critical component of that effort, Dimon said, is refocusing the bank on core areas and exiting units like student loan origination and most of the physical commodities sales and trading business.

JPMorgan has ratcheted up its spending on controls, Dimon noted, increasing the “total spend on controls” to roughly $1 billion this year. Spending on technology that helps bolster controls has increased by 27 percent since 2011, Dimon said.

To proactively thwart any regulatory missteps, Dimon said the firm was “conducting an in-depth review” of its foreign correspondent banking business — an area that could pose regulatory headaches going forward.

Also critical to JPMorgan’s redoubled efforts, Dimon said, was a “more open and transparent relationship with regulators.” Within Washington, JPMorgan developed a reputation as something of a bully. As the bank works to mend its frayed relationships with regulators, Dimon said he personally met with bank examiners from the comptroller’s office and the Fed.


Despite the cautiously optimistic tone from Dimon, JPMorgan is still contending with a range of regulatory and legal problems.

Aside from the trading losses, JPMorgan faces inquiries from at least seven federal agencies and two European countries. Those inquiries have a vast scope, including the bank’s hiring practices in China and mortgage loans sold to investors during the depths of the financial crisis.