Financial Risk Manager Part 1
Get started today
Ultimate access to all questions.
What was the main purpose of the Chief Investment Office, CIO, at J.P. Morgan Chase Bank in the run-up to the London Whale scandal?
Other
Community
TTanishq
A
To monitor the operations of traders.
B
To invest excess deposits.
C
To look into ways in which the bank could reduce its regulatory capital requirements.
D
To raise funds for investment by floating long-term high-yield bonds.
Explanation:
The Chief Investment Office (CIO) at J.P. Morgan Chase Bank was primarily responsible for investing excess deposits. This function became central to the London Whale scandal in 2012, where the CIO's synthetic credit portfolio incurred massive losses due to large, risky positions in credit derivatives. The office was managing the bank's excess deposits to generate returns, which led to the controversial trading activities that resulted in approximately $6.2 billion in losses.
Comments
Loading comments...