JPMorgan Chase has been lobbying to make exactly the kind of trades that just lost the company billions of dollars.
New York-- JPMorgan Chase announced Monday that Ina Drew, the firms chief investment officer, has left the bank after revelations of a $2 billion loss sustained over the past six weeks. These developments illustrate a huge need for Congress to implement more oversight, not less regulation on the financial sector.
The rule was designed by Congress to limit the very kind of proprietary trading that JPMorgan was seeking...The loophole is known as portfolio hedging, a strategy that essentially allows banks to view an investment portfolio as a whole and take actions to offset the risks of the entire portfolio. That contrasts with the traditional definition of hedging, which matches an individual security or trading position with an inversely related investment -- so when one goes up, the other goes down. (Reporting by Edward Wyatt in The New York Times.)