After the revelation $ 2 billion loss from trading in the JP Morgan Chief Investment Office (CIO) in London, a board of directors charged with recommending changes to their risk management practices and corporate governance. The case provides background on the risk management infrastructure respected JP Morgan and discusses how General Manager focused on its historic strength in risk management to oppose the need for the United States to implement strict regulations in the Dodd-Frank Act and associated Walker amendment. The role of regulation is significant. As a result of trying to meet the stringent requirements of these standards in the U.S., as well as compliance with the new Basel III, the CIO took significant derivative positions that are not well understood, and instead of reducing the risk of firms actually increased it. Of further interest is the simultaneous change in the method of JP Morgan, the calculation of risk, which will significantly reduce the risk of measurement and, therefore, improve the level of firm risk-weighted assets. "Hide
by Steven Sapp Source: Richard Ivey School of Business Foundation 6 pages. Publication Date: September 25, 2012. Prod. #: W12218-PDF-ENG
