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 Friday.
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. - Sapa-AFP