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JPMorgan's internal controls under increased scrutiny: WSJ
(Reuters) - JPMorgan Chase & Co.'s (JPM.N) internal controls have come under increased scrutiny by regulators who have asked the bank to demonstrate its risk models are designed and working properly, the Wall Street Journal reported, citing to people close to the situation.
The bank's primary regulator, the Office of the Comptroller of the Currency, has requested reviews of models that measure the possible effects of everything from trading losses to interest-rate moves, the Journal said.
In May, the bank's chief executive, Jamie Dimon, announced the company had lost at least $2 billion through "egregious mistakes" in trading and that the bank had changed its model for measuring so-called value-at-risk in the Chief Investment Office (CIO) where the derivatives portfolio was managed.
The value-at-risk model, which provides an estimate of how much could be lost on average in a single trading day, is one model under scrutiny, the paper said.
JPMorgan officials were not immediately available for comment outside regular U.S. business hours.
The news comes after a person close to the matter said the disastrous derivatives trades may cause the bank's losses to rise to $6 billion in the second quarter, far more than the original estimate of at least $2 billion. Other reports have said the loss could reach $9 billion.
The Securities and Exchange Commission is also investigating disclosures on the value-at-risk measuring model change, the Journal said.
Officials from the SEC and the comptroller's office could not be reached for comment.
(Reporting by Balaji Sridharan and Siddharth Cavale in Bangalore; Editing by Matt Driskill)
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