JPMorgan Chase London Whale H: Cross-Border Regulation
Yale Program on Financial Stability Case Study 2014-2H-V1
11 Pages Posted: 7 Apr 2015
Date Written: December 1, 2014
As a global financial service provider, JPMorgan Chase (JPM) is supervised by banking regulatory agencies in different countries. Bruno Iksil, the derivatives trader primarily responsible for the $6 billion trading loss in 2012, was based in JPM’s London office. This office was regulated both by the Office of the Comptroller of the Currency (OCC) of the United States and by the Financial Services Authority (FSA), which served as the sole regulator of all financial services in the United Kingdom. Banking regulators in the US and the UK have entered into agreements with one another to define basic parameters for sharing information gathered during bank examinations and even assisting one another with bank inspections under certain circumstances. However, even as JPM sought to stifle OCC and FSA supervision, cooperation between the US and UK regulators was minimal.
Keywords: Systemic Risk, Financial Crises, Financial Regulation
JEL Classification: G01, G28
Suggested Citation: Suggested Citation