JPMorgan $2bn Trading Loss: Executives Involved 'to Resign'

JPMorgan executives who oversaw a $2bn (£1.24bn) loss for the bank in a catastrophic hedging strategy at the bank's chief investment office will resign, according to a Reuters report.

Citing anonymous sources close to the situation, Reuters said Ina Drew, chief investment officer and one of JPMorgan's highest paid executives, as well as two London-based staff members directly underneath her, Achilles Macris, head of the trading team, and Javier Martin-Artajo, a team member, will quit imminently.

"We made a terrible, egregious mistake. There's almost no excuse for it," Jamie Dimon, JPMorgan chief executive, told American news network NBC after details of the loss emerged, adding that the handling of the portfolio had been "sloppy" and "stupid".

JPMorgan stock plummeted in value by as much as $15bn because of the loss.

Dimon has refused to give exact details on the trading that led to the loss, but said that the bank's strategy on the derivatives portfolio, which was tied to the creditworthiness, was "badly vetted", "badly monitored", and "should never have happened".

The portfolio is thought to involve credit default swaps, which protects the buyer in the event of a loan default.

An internal probe is now under way to see if London-based traders working close to the strategy attempted to mask the loss, according to the Financial Times.

Credit rating agency Fitch has downgraded JPMorgan's Long-Term Issuer Default Rating (IDR) to A+ from AA-, and its short-term grade to F1 from F1+.

Standard & Poor's has lowered its outlook on the bank from stable to negative.