Economic Essay Example | Topics and Well Written Essays - 500 words - 5

sparing - Essay ExampleSubsequently, the bulk off the sloppiness emanate from the irregular investment decisions of that JP Morgan undertook. According to Greenberg and Eavis, managers were admitting the assert has a lower quality of risk management that was not sophisticated enough to cushion it from the $2bn loss. Dimon was rhombus that the execution of the hedging strategy was inappropriate and poor.This revelation of the loss was causing ripples in the Stock markets of the US and did affect the share price of JP Morgan. The loss dented the share value of the investment bank by 9.3% on Friday and for a bank that was previously recording significant earnings, this was shocking to its stakeholders2. The bank has enlarged its citation quantities over several years of concern in profitable investment projects, which were subject to exhaustive monitor from management. However, recently JP Morgan did not incorporate these stringent measures into the diverse hedging strategies of th e bank thus resulting in the fatal loss in their earnings. In 2007, there was discontent of various stakeholders of the lodge in the manner The main(prenominal) investment Officer (CIO) Bruno Iskil was utilizing the corporations resources in undertaking unnecessary risks.In addition to the financial woes, the CEO of JP Morgan was suggesting the company could further experience losses of $ 1 billion due to the inevitable economic turbulences. This supposition bequeath increasingly injure the share prices of the bank, which volition dwindle further downwards3. This can discourage potential clients from trading in the stocks of JP Morgan since they will be of a lower value. This factor will diminish their confidence and the clients will not be enthusiastic to deposit their savings in JP Morgan. Furthermore, Fitch, a credit rating agency, did rank the bank and was affirmative that this decline could extend unless JP Morgan acts upon the