Fed to Study How Banks Manage Cash After JPMorgan Loss
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JPMorgan Chase & Co.’s $2 billion trading loss has prompted the Federal Reserve Bank of New York to examine how banks in its district are managing cash after receiving a flood of deposits since the credit crisis, according to a person familiar with the matter.
New York-based JPMorgan’s trading loss, announced last week, occurred in its chief investment office, which oversees about $360 billion, the difference between deposits and what the bank lends. The New York Fed is reviewing the structure of investment units and similar businesses at other banks it regulates, said the person, who wasn’t authorized to discuss the matter publicly and declined to be identified.