20120717 Follow Me 432 Who's paying for JPMorgan's loss?

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Who's paying for JPMorgan's loss?

By Maureen Farrell @CNNMoneyInvest July 14, 2012: 12:17 PM ET

The forwarded article was taken from http://money.cnn.com/2012/07/13/investing/jpmorgan-clawbacks/index.htm

You guys are welcome to comment the issues covered in the article under the main thread.

NEW YORK (CNNMoney) -- Four JPMorgan Chase (JPM, Fortune 500) executives, including former chief investment officer Ina Drew, will give back up to two years of compensation for the so-called London Whale loss, which so far totals $5.8 billion.

JPMorgan executives declined to put a dollar figure on the clawbacks Friday, but said they would take back the maximum amount allowed under JPMorgan's bylaws, which amounts to two years' worth of compensation.


Drew, who oversaw the unit responsible for the loss, volunteered to give back the maximum amount, and JPMorgan executives said they were taking her up on her offer.

Drew retired shortly after the loss was revealed on May 10th. At the time, JPMorgan was criticized for allowing Drew to retire because it allowed her to keep a $27 million exit package.

She received $14 million in total compensation in 2011 and $15 million in 2010, according to JPMorgan's annual proxy statement.

In a conference call with analysts Friday, CEO Jamie Dimon took a moment to praise Drew's contribution to JPMorgan. "I have enormous respect for Ina as a professional and as a person. She has integrity and tried to do what's right."

The bank declined to name the other three managers, other than to say they worked directly on the trades.
All four have left the bank since the loss was discovered.

"This is the more extreme end of the spectrum as far as clawbacks, but it's also the extreme end of the spectrum for losses," said Steve Hall, CEO of the executive compensation firm Steven Hall & Partners.

CEO Jamie Dimon, who was the highest paid rank CEO in 2011, told analysts Friday that any decision regarding his salary or bonus was up to the board. Dimon earned $23.1 million in cash and stock last year.

Bank executives said this is just the beginning of its plans to claw back pay from those traders and managers who were responsible for the massive trading losses.

JPMorgan has been playing defense since the errant trade first came to light. Dimon spent two days in front of lawmakers in Congress last month, taking the blame, apologizing and promising to take action.
On Friday, Dimon and his deputies took pains to explain the new dawn in risk management and in the bank's chief investment office.

JPMorgan executives said a "couple" of other individuals related to the trades have left the bank and a "couple" of others have been reassigned to different areas. Executives declined to comment on the exact numbers.
The CIO office will no longer trade derivatives. Unwinding what's left of the London Whale position in derivative indexes is now the task of the investment banking division.

Dimon ended his conversation with analysts Friday morning saying "better news next time." Investors appear to be banking on that as the stock moved up nearly 6% Friday.  

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关键词：JPMorgan follow Morgan Paying morga 2012 433 paying

r9205009 发表于 2012-7-16 09:24
感恩用心

We need more people to participate in economic discussion here.

It is often the case for moral hazards, but it is not reasonable to penalize the exact person severely since sometimes it is not possible to prevent risks or the losses can not be fully compensated by the individuals.

it is so hard for me to totally understand this atical,thanks for the youdao dictionary,anyway,it took me nearly an hour and i have achieved somthing.in the fllowing time,i must work hader to get up others.

To be a responsible manager is not so easy. If gain, the manager can get just part of the profit. If loss, the manager should compensate. Then to be a shareholder will be much better. Capital is more meaningful in the market.
Besides, I don't know the background clearly.

give some background material:
伦敦鲸(London Whale):
Bruno Michel Iksil,受雇于摩根大通的交易员，在2012年春季因对企业债的交易造成信贷市场的剧烈波动被称为“伦敦鲸”。“伦敦鲸”的交易近年来为摩根大通首席投资办公室每年赚1亿美元左右。摩根大通于5月10日发布通知，称首席投资办公室在合成债券上的仓位出现了20亿美元交易损失，被该部门其他盈利抵消后预计出现8亿美元亏损。这些亏损主要来源于伦敦鲸的交易。而伦敦鲸交易的曝光，也造成了关于摩根大通首席投资办公室以及伦敦鲸的交易是为了对冲风险还是银行自营交易行为的争论。
事件过程
摩根大通的一名被称为“伦敦鲸”的交易员，他的全名叫Bruno Michel Iksil。
Iksil工作的地方是摩根大通位于伦敦的首资投资办公室（Chief Investment Office，CIO），主要从事债券洐生品指数的投资工作。这位神秘的交易员近几年来每年都为CIO赚入近1亿美元。
债券洐生品指数市场是一个场外市场，在过去十年已经取代企业债市场成为对企业违约风险定价的主要市场。
Iksil近期不断卖出跟企业债相关的CDS指数，对手方主要是对冲基金。据彭博报道，作为Iksil对手方的投资者抱怨说，Iksil的CDS空头头寸大得惊人，他一个人就可以撬动规模高达数万亿美元的债券市场，操作行为严重扭曲了债券市场的价格，影响到债券持有人的保险成本。
Iksil很少对外透露他的CDS头寸，但两名对冲基金交易员告诉彭博，当他们被告知Iksil已经入场时，市场价格经常会出现大幅波动。
摩根大通说，首席投资办公室的主要职能是管理期限较长的结构化资产和负债，而并非是短期获利，“首席投资办公室的业绩已经在季度财报中公布，对监管者来说是完全透明的”。暂时没有任何证据显示Iksil的操作违规。
双方对赌的头寸正在加速增大，美银美林交易员Kavi Gupta周四发送给投资者的信息中说，“市场已经闻到血腥味”。
Bruno Michel Iksil 其人
Iksil是法国人，2007年1月加入摩根大通，每周从巴黎的家中前往伦敦上班。据知情人士透露，跟Iksil一起工作的还有两名初级交易员，他们的交易策略需要获得摩根大通的高管批准。
Iksil经常看空企业债市场并建立相应的头寸，他业绩最佳的几个时段发生在债券市场下跌的时候。
然而，最近Iksil开始看多企业债市场，并做空与125家企业债相关的CDS指数，押注企业的信用环境改善。近几周以来，某些对冲基金受Iksil操纵的价格信号影响，建立了相当重的关于这类企业债CDS的多头头寸，而卖出方正好是Iksil。
在某些情况下，可以认为Iksil已经破坏了这一企业债CDS指数，原因是投资者不能再押注该指数与其组成部分的价格趋于一致，两者之间的套利空间不再趋于零。