JPMorgan losses 'could hit $9 bn'

The losses from JPMorgan's botched derivatives trade may reach $9 billion, nearly five times the amount announced in May, the New York Times reported Thursday. The Times quoted an unnamed source as saying a report generated in April showed that in a worst-case scenario the losses from the trade could reach $8-9 billion, but said some regulators expect something closer to $6-7 billion. Last week the CNBC business news network had also said the final losses would not exceed $6-7 billion, given that the company had moved quickly to unwind the position. JPMorgan chief executive Jamie Dimon had said the eventual losses from the bad trade could be higher than the $2 billion announced in May. By comparison, JPMorgan posted a profit of $5.4 billion in the first quarter of this year. Significantly higher losses would raise new questions about big Wall Street banks, which critics accuse of using their "too big to fail" status to make risky bets that could plunge the limping US economy into further peril. JPMorgan's sour bet also raised doubts about whether the United States had adequately reformed its regulatory apparatus in the aftermath of the 2008 financial crisis, caused in large part by risky Wall Street trading practices. The newspaper said JPMorgan would disclose part of the total losses on July 13, when it releases second-quarter earnings. In hearings before US lawmakers Dimon has acknowledged the bank's poor judgment and apologized for the losses, but argued it was an "isolated event" dwarfed by the bank's huge capital cushion. He has said the firm's "fortress balance sheet" at the end of the first quarter showed $190 billion in equity and over $30 billion in reserves, part of the bank's overall deposits of $1.1 trillion and loans of $700 billion.