Authors: Jeanette Torres
STAN HONDA/AFP/Getty Images(NEW YORK) -- Wall Street investors will enter the trading day on Monday hoping that the stunning announcement by JPMorgan Chase that it suffered $2 billion in trading losses has blown over.
Things didn't turn out too badly last Friday as the Dow Jones Industrial Average only closed down 24 points as the market took JPMorgan's word that the mess of its own doing wouldn't affect customers.
The largest U.S. bank traced its big loss to the firm's chief investment office, run by Ina Drew, who is expected to turn in her resignation along with two other executives. Drew's unit made losing bets on "synthetic credit securities" -- the same kind of instruments that nearly led to a collapse of the financial system in 2008, prompting a nearly $1 trillion government bailout.
The SEC is looking into the matter, but CEO Jamie Dimon says the bank has more than enough money to handle the risk.
On Thursday, Dimon admitted the trading loss was an "egregious" failure in a unit managing risks, but he added that just because the bank did something "stupid" doesn't mean other firms are having such trouble.
"There were many errors, sloppiness and bad judgment," Dimon said. "These were grievous mistakes, they were self-inflicted."
Congress and the FDIC have been grappling with how to prevent "too big to fail" institutions from taking big risks knowing that the U.S. Treasury is there to back them up.
Copyright 2012 ABC News Radio
