Regulators say poor control and risk management to blame for last year’s unexpected losses

JP Morgan ordered to improve risk management

JP Morgan Chase has been ordered to improve its risk management by US regulators after poor practices contributed to the company posting a €4.6bn loss last year.

Regulators have identified lapses in control and risk management as the main reason the bank lost billions of dollars in trades by Bruno Iksil, an employee known as the London Whale.

JP Morgan has been told to examine how it pays its top executives, particularly with regard to the way in which they are rewarded for taking on risk.

However, despite last year’s losses, the US Federal Reserve and Office of the Comptroller of the Currency did not levy fines on the bank.

JP Morgan is still under investigation by the US Department of Justice, the Securities and Exchange Commission, the UK Financial Services Authority and several other regulatory bodies.