J.P. Morgan Chase was downgraded in a confidential government scorecard over concerns about the company's management and its board, a blow to a firm that has long been considered one of the best-run on Wall Street.
The Wall Street Journal reports that the firm'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 $6bn.
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J.P. Morgan Bosses Hit by Bank Regulator (subscriber content)