Printer Friendly

Fitch downgrades JPMorgan Chase after huge loss.

New York, May 12 (Xinhua-ANI): Fitch Ratings downgraded JPMorgan Chase's long term debt rating to A+ from AA- on Friday after the bank reveals a stunning trading loss, citing reputational risk and risk governance deficiencies.

Meanwhile, the rating firm also placed the bank's all parent and subsidiary long-term ratings on negative watch.

The rating actions came one day after JPM's disclosure of a 2- billion-dollar trading loss on its synthetic credit positions in its Chief Investment Office.

Fitch viewed the size of loss as manageable but believed the potential reputational risk and risk governance issues raised at JPM are no longer consistent with an AA- rating.

Despite the downgrade, the rating firm said that JPMorgan Chase is still a dominant player in the U.S. market and keeps growing in global financial market as its capital remains sound and compares well with global peers, providing the bank with sufficient cushion to absorb a material idiosyncratic loss event.

Fitch also said that its future moves on the bank's rating will base on how JPM has addressed what Fitch views to be risk management and oversight deficiencies that allowed such a loss to occur.

Fitch will also review the potential implications for market confidence in the bank and reputational damage as a result of this loss on both its liquidity profile and counterparty and dealings, according to its statement. (Xinhua-ANI)


Copyright 2012 All rights reserved.

Provided by an company
COPYRIGHT 2012 Al Bawaba (Middle East) Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2012 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Asian News International
Date:May 12, 2012
Previous Article:London-based trader 'Voldemort' behind J P Morgan's staggering $2billion bank 'black hole'.
Next Article:EU condemns attacks in Syria.

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters