JPMorgan Chase & Co.'s switch to a new risk model may have helped fuel a $2 billion trading loss at the chief investment office, Chief Executive Officer Jamie Dimon told a U.S. Senate panel today.
Amid chants from protesters, Dimon arrived shortly before 10 a.m. and began answering questions about the causes of the loss, which he described as part of a hedging strategy.
The new measurement of value-at-risk was "implemented in January and did effectively increase the amount of risk this unit was able to take," Dimon told the Senate Banking Committee. On April 13, when he downplayed the risks of trades on a call with analysts, "we were still unaware that the model might have contributed to the problem," Dimon said. "So when we found out later on, we went back to the old model."
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