Fitch Ratings has downgraded its assessment of America's biggest bank, JPMorgan Chase & Co.
People walk inside the lobby of a JPMorgan Chase building Thursday, May 10, 2012, in New York. JPMorgan Chase, the largest bank in the United States, said Thursday that it lost $2 billion in the past six weeks in a trading portfolio designed to hedge against risks the company takes with its own money. The company's stock plunged almost 7 percent in after-hours trading after the loss was announced. Other bank stocks, including Citigroup and Bank of America, suffered heavy losses as well.The Associated Press
NEW YORK (AP) — Fitch Ratings has downgraded its assessment of America's biggest bank, JPMorgan Chase & Co.
The rating agency's move comes a day after JPMorgan disclosed a surprise $2 billion trading loss in a portfolio designed to hedge against risks the company takes with its own money.
Fitch says the size of the loss is manageable but the risk it brings is not. It says the magnitude of the loss and JPMorgan's hedging position imply a lack of liquidity. It also raises questions about JPMorgan's practices, oversights and other key issues.
Fitch says JPMorgan's risk to its reputation and governance no longer merit an "AA-" rating and lowered its long-term issuer default rating one notch to "A+", still investment-grade.
It placed the New York company on review for possible future downgrades.