JP Morgan executives faced harsh questions from a Senate panel headed by Senator Carl Levin (D-Michigan) over the bank's so-called whale trades that resulted in a $6.2 billion loss.
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Our findings open a window into the hidden world of high stakes derivatives trading by big banks. Exposes a derivatives trading culture at JPMorgan. Ohio on a risk. That hid losses. And that misinformed the public. -- swear that the testimony that you're about to give to this subcommittee will be the truth the whole truth and nothing but the truth so help you guys. Clearly mistakes were -- but ultimately my oversight of the synthetic credit but was undermined. I too critical fact that I have come to learn only recently based on the company's public statements. First the company's new -- model was flawed. And significantly understated the real -- in the book reported to me. And second some members of the London team failed to value positions properly. And in good faith. He minimized. Reported in projected losses. And hit for me important information regarding the terrorists of the book. This thing was blown up in the newspaper you have though he had these whale traits he lost. Billions of dollars and you're representing to the public that the regulators got information on those positions. On a regular basis. Senators it turned out that was not true. Senator they've received information. On those positions at a regular basis on the portfolio I'm asking you whether that is accurate. The OCC got the information on those positions on a regular recurring basis is part of your normalized report and asking that as an act. They got information not information saying. I'm every dispute and keep reading AT&T give me the answer that they get the information on those positions on a regular and recurring basis you know what those positions there. That's the position in the oil trade. -- as part of a normalized reporting. Today. They did not get that detailed positions. Regularly OK got summary information I'll settle for -- Russian firm has among other things conducted a comprehensive self assessment of its entire risk organization. And as a result is implementing a series of improvements across the entire firm. Where there is room to improve we can and will do so I clearly -- out having done the review. That these people ultimately war -- marking. We're we're not properly marking their books. During the quarter at least during the course. The middle of march to the end of march and that is what we came to know during the. Course there -- ways in which the march were made word that. What's changed. In order to reduce the loss -- the vote yes to island. You mourned in early 2012. I think it's a matter of record at risk measures predicted massive losses. After the bank lost over six billion dollars. -- stand by your statement that the risk measures were quote garbage and not since quote sensible. That was what our very first reaction. To. A number that. You know was two to three times what we've seen previously and person changes we've made so my first reaction was doesn't look right. -- Clearly yes as we discussed a little earlier it turned out to be. It turned out to be. Predictive.