We were stupid, says Jpmorgan

The chief executive of Jpmorgan Chase admitted yesterday that his bank had been ‘‘sloppy’’ and ‘‘stupid’’ in failing to respond to warnings about losses being created by one of its London-based traders.

Jamie Dimon also confessed that the US$2 billion (NZ$2.55B) hole announced on Friday would make it harder for him and for the sector to resist tougher government regulations. The affair had come at a ‘‘very unfortunate, inopportune time’’, he said.

Bruno Iksil, who worked in JPMORgan’s chief investment office in London, incurred the losses in a complex derivatives trade.

The Wall Street Journal and Bloomberg News reported last month that Iksil, who was nicknamed ‘‘the London Whale’’ because of the size of his positions, had made huge bets that were distorting prices and could prove hard to unwind.

At the time, Dimon dismissed the reports as ‘‘a complete tempest in a teapot’’, but confessed yesterday that had been a mistake. He said he had been ‘‘completely wrong’’ to dismiss the fears of the losses.

He told NBC’S Meet the Press programme: ‘‘I was dead wrong when I said that. I obviously didn’t know because I never would have said that. And one of the reasons we came public was because we wanted to say: ‘You know what? We told you something that was completely wrong a mere four weeks ago.’’’

However, as on Friday, Dimon again did not say how the trades had backfired on the bank. Analysts have speculated that the refusal to give details means that Iksil’s position is still open and there is the possibility that the losses could be even greater.

Dimon said that, in hindsight, JPMORgan Chase had taken ‘‘far too much risk’’ in how it managed the trade. ‘‘The strategy we had was badly vetted.’’

Dimon, who has been a strident critic of increased regulation of the banking sector, said the bank was doing its own full investigation but was braced for regulators to launch their own.