JP Morgans Financial Risk Management Essay Example | Topics and Well Written Essays - 250 words

JP Morgans Financial Risk Management - Essay Example ures established by the bank to control the credit derivatives trading carried out by the chief investment office were insufficient to shield the bank from the external material risks that arose from the trading strategies and positions adopted by the CIO; The risk management model adopted by the bank lacked adequate processes and procedures to monitor, measure understand, and control the risk arising from the credit derivatives trading activities of the chief investment office; and The valuation procedures used by the chief investment office lacked adequate and effective assessment as the credit derivatives trading strategy adopted by the CIO increased the CIO’s risk based on the Value at Risk model adopted by the bank. This resulted in the CIO adopting a new Value at Risk model, which increased its risk but continued to use the risk limits used in the earlier ‘VaR’ model (Belshaw, 2013). Belshaw, G. 2013. Department of the Treasury: Office of the Comptroller of the Currency. Consent Order. Consent Order. Accessed February 11, 2014