MURDER, POLITICS, AND THE END OF THE JAZZ AGE
by Michael Wolraich
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Dealbook | Regulators’ Shake-Up Seen as Missed Bid to Police JPMorgan
By EmmaZahn on Sat, 07/14/2012 - 4:18pm |
After the financial crisis, regulators vowed to overhaul supervision of the nation’s largest banks.
As part of that effort, the Federal Reserve Bank of New York in mid-2011 replaced virtually all of its roughly 40 examiners at JPMorgan Chase to bolster the team’s expertise and prevent regulators from forming cozy ties with executives, according to several current and former government officials who spoke on the condition of anonymity.
But those changes left the New York Fed’s front-line examiners without deep knowledge of JPMorgan’s operations for a brief yet critical time, said those people, who spoke on the condition of anonymity because there is a federal investigation of the bank.
Forced to play catch-up, the examiners struggled to understand the inner workings of a powerful investment unit, those officials said. At first, the examiners sought basic information about the group, including the name of the unit’s core trading portfolio.
By the time they got up to speed, it was too late. In May, JPMorgan disclosed a multibillion-dollar trading loss in the investment unit.
URL:
http://dealbook.nytimes.com/2012/07/11/shake-up-at-new-york-fed-is-said-to-cloud-view-of-jpmorgans-risk/
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