Zerohedge london whale

That Iksil apparently believed that he could not be bullied by other counterparties because of the fact of trading for JPM speaks to how he viewed his activities, which were entirely visible to other market participants. The fact that big banks no longer trade their investment books illustrates the diminution of liquidity that has occurred since the adoption of the Volcker Rule. But for the banks, the legacy of the London Whale and the larger implementation of Dodd-Frank has left a deep mark on risk managers and those concerned with maintaining internal systems and controls at large banks.

In an account on his website, Iksil also blames senior executives at the bank for the investment strategies that led to those losses. We know about the Whale because of the implementation of the Volcker Rule.

Notice that at no point has the financial media or regulators questioned the company line about what actually happened and when. Our old pal Nom de Plumber commented over the weekend:. The problem was not complex risk modeling or market risk measurement. The quants tried to re-jigger VaR measurement of the trades, to avoid breaching risk limits — for CIO trades which Jamie specifically demanded of Ina Drew… regardless of preceding protests from risk managers like John Hogan and Robert Rupp.

Consider the bizarre situation in when counterparties of Iksil facing the JPM commercial bank were unable to make margin calls, but the JPM investment bank was making margin calls on these same counterparties for positions in the very same indexed credit derivatives. Bruno Iksil has waited for the proverbial concrete to harden over the past few years before coming forward with his latest accusations.

This makes it difficult or impossible for Dimon and his lieutenants to change their story now. The episode involving the London Whale illustrates how difficult it is to learn the truth about the inner working of large banks. Big banks profit by exploiting information and conflicts found between the world of credit and the world of securities.

But the London Whale episode also shows in graphic terms why the Volcker Rule prohibitions against banks trading for their own account need to be preserved and strengthened.

There is a fundamental conflict between a bank acting as a lender and trading credit derivatives. More, if the CEO of a bank — any bank — can short circuit the internal controls of his institution in order to enhance returns with a bet at the credit derivative roulette table, then by definition that bank cannot be safe and sound. Christopher Whalen. Christopher Whalen is a Wall Street insider who has specialized in the intersection of politics and finance.

He has worked in politics, at the Federal Reserve Bank of New York and as an investment banker for more than three decades.

Considered one of the most incisive and thoughtful financial analysts on Wall Street, Mr. Whalen coverers a wide range of important topics ranging from banking to housing to global economics and the Federal Reserve.

Assuming no RWA growth vs. As Bloomberg further notes, the hits from Archegos and Greensill have spoiled a plan by Gottstein to start the year with a clean slate. The crises have more than overshadowed its best start to the year in a decade.

Finally, JPM tries to answer a key question for many investors, namely what has happened with holdings as speculated in the press of Archegos Capital? Once Archegos Captial failed to meet its margin commitments, the sell-off intensified further as banks started offloading via sizeable block trades the holdings posted by the fund as collateral, prompting more declines. Based on the latest publicly available disclosure the banks with the largest exposure to the mentioned companies were Morgan Stanley, Credit Suisse, Goldman Sachs, Nomura and to a lesser extent UBS and DB more details below.

Traded volumes for the eight companies peaked on Friday with daily volumes being on avg. Based on latest available public filings, JPM calculates that the banks which had the largest holdings in the eight Archegos Capital-linked stocks mentioned by the press were Morgan Stanley, Credit Suisse, Goldman Sachs and Nomura.

Finally, courtesy of JPM, here is a summary of all the latest publicly available information disclosing what exposure each bank may have had - and still has - to Archegos:. Here's our Cookie Policy. ZeroHedge Reads.