March 20 (Reuters) - A key U.S. bank regulator has called for improvement in the management of JPMorgan Chase & Co on concerns linked to the multi-billion dollar “London Whale” trading loss last year, the Wall Street Journal reported, citing knowledgeable sources.
The Office of the Comptroller of the Currency (OCC) downgraded the firm’s management rating in July to level 3, meaning the board’s abilities “may be insufficient” and “need improvement”, the paper said, quoting sources familiar with the matter. ()
U.S. regulators measure the strength of financial institutions using a confidential ratings yardstick that has several components including asset quality and management capability, the paper said.
French-born JPMorgan trader Bruno Iksil became known as the “London Whale” in credit markets because of the size of his bets, which unravelled in 2012 leaving the U.S. investment bank with a $6 billion trading loss and a lot of wounded pride.
The Journal reported that the OCC’s decision to downgrade the bank’s management rating was not related solely to Iksil’s trades. It did not indicate the rating’s previous level or how far it had dropped.
A JPMorgan spokesman declined to comment on the rating change but told the Journal, “we are working hard to strengthen all of our processes and have already remediated many significant issues.”
JPMorgan and OCC could not immediately be reached for comment by Reuters outside of U.S. business hours.