JPMorgan beefs up compliance efforts

Updated 15 September 2013

JPMorgan beefs up compliance efforts

NEW YORK CITY: JPMorgan Chase is spending billions on new compliance staff and programs to address a wave of regulatory scrutiny after recent problems, according to a Wall Street Journal report.
The US banking behemoth plans to spend an additional $4 billion and direct some 5,000 additional employees to work on compliance, the Journal said, citing people close to the bank.
The efforts come as the government probes the bank's compliance with US regulations.
JPMorgan's trading fiasco, dubbed the "London whale" because of the location and size of bets that went sour, has cost the bank $6 billion in losses.
The bank currently is negotiating settlements with several US regulatory agencies, which could lead to up to $600 million in penalties, the Journal reported, citing people close to the talks.
"Fixing our controls issues is job No. 1," the newspaper quoted chief executive Jamie Dimon as saying.
"This is a huge investment of people, time and money... but it will make us stronger in the long run."
JPMorgan said in its most recent quarterly securities filing that it is currently experiencing "an unprecedented increase in regulation and supervision."
After top regulators from the office of the Comptroller of the Currency and Federal Reserve told Dimon in April that they had lost trust in management, Dimon revised reporting lines to empower compliance officials, beefed up compliance staff and provided 750,000 hours of training on regulatory and control issues, the Journal said.
Dimon also shook up the executive ranks, leaving Matt Zames and Michael Cavanagh as top lieutenants who are considered front-runners to succeed Dimon, it said.


Oil prices surge after attacks hit Saudi output

Updated 16 September 2019

Oil prices surge after attacks hit Saudi output

  • The Houthi attacks hit two Aramco sites and effectively shut down six percent of the global oil supply
  • President Donald Trump said Sunday the US was ‘locked and loaded’ to respond to the attacks

HONG KONG: Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world’s top producer by half, fueling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.
Brent futures surged $12 in the first few minutes of business — the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent — while WTI jumped more than $8, or 15 percent.
Both contracts pared the gains but were both still more than 10 percent up.
The attack by Tehran-backed Houthi militia in neighboring Yemen, where a Saudi-led coalition is bogged down in a five-year war, hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply.
Trump said Sunday the US was “locked and loaded” to respond to the attack, while Secretary of State Mike Pompeo said: “The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression.”
Tehran denies the accusations but the news revived fears of a conflict in the tinderbox Middle East after a series of attacks on oil tankers earlier this year that were also blamed on Iran.
“Tensions in the Middle East are rising quickly, meaning this story will continue to reverberate this week even after the knee-jerk panic in oil markets this morning,” said Jeffrey Halley, senior market analyst at OANDA.
Trump authorized the release of US supplies from its Strategic Petroleum Reserve, while Aramco said more than half of the five million barrels of production lost will be restored by tomorrow.
But the strikes raise concerns about the security of supplies from the world’s biggest producer.
Oil prices had dropped last week after news that Trump had fired his anti-Iran hawkish national security adviser John Bolton, which was seen as paving the way for an easing of tensions in the region.
“One thing we can say with confidence is that if part of the reason for last week’s fall in oil and improvement in geopolitical risk sentiment was the news of John Bolton’s sacking ... and thoughts this was a precursor to some form of rapprochement between Trump and Iran, then it is no longer valid,” said Ray Attrill at National Australia Bank.