14 Jun 2012

Apology made by JP Morgan Chase head

6:55 am on 14 June 2012

JP Morgan Chase chairman and chief executive Jamie Dimon has apologised for $US2 billion losses by the bank on high-risk trades.

"We have let a lot of people down, and we are very sorry," he said, testifying to the US Senate Banking Committee.

He said the losses occurred because traders were poorly managed and did not understand what they were doing.

JP Morgan accumulated the losses when a hedging strategy, normally used by banks and investors to reduce the risk of losses, went wrong.

The BBC reports the testimony did not give an update on whether the bank's losses had risen beyond last month's estimate $US2 billion.

Mr Dimon was apologetic, but said the bank remained in sound financial shape and that the loss was an isolated incident.

Much of the hearing focused on whether risks can be spotted before they grow to the point of damaging a bank or the banking system.