J.P. Morgan Management Downgrade: What's the Point?
J.P. Morgan Chase & Co. (NYSE: JPM) suffered another blow to its reputation, as a government agency downgraded its rating of the financial firm's management. What that means for the bank from a practical standpoint may be little.
The Office of the Comptroller of the Currency lowered its rating on J.P. Morgan to a level that indicates heightened concern about Jamie Dimon, his key aides and the board. But if the ratings change has no consequences, why should the government bother at all?
According to The Wall Street Journal:
The New York company's management rating from the Office of the Comptroller of the Currency fell one notch last July to a level that signifies oversight "needs improvement," following the revelation of what are known as the "London whale" trading losses, said people familiar with the regulatory assessment.
Grading is on a scale of 1 to 5, with 5 being worst. J.P. Morgan had been at level 2, indicating "satisfactory management." The people said the downgrade to level 3 wasn't solely related to a London employee's large trades - in indexes tracking the health of a group of companies - that led to losses exceeding $6 billion.
Filed under: 24/7 Wall St. Wire, Banking & Finance, Regulation Tagged: JPM