When a Bank Loses Billions, Who Wins?
President and CEO of JPMorgan Chase Co. Jamie Dimon testifies before a Senate Banking Committee hearing in June. The committee was hearing testimony from Dimon on how JPMorgan Chase lost billions in stock market trades. Photo by Mark Wilson/Getty Images.
Paul Solman frequently answers questions from the NewsHour audience on business and economic news here on his Making Sen$e page. Here is Wednesday’s query:
Name: Hill Kemp
Question: When Morgan Stanley loses $7 billion, does that money just disappear into the ether or does some other party(s) make $7 billion?
Paul Solman: I’m not sure if you mean JPMorgan Chase instead of Morgan Stanley. Before the 1930s, they were the same firm, but the Banking Act of 1933, often referred to as “Glass-Steagall” after its congressional sponsors, effectively hived off investment banking from commercial — deposit — banking in order to limit risk. Thus the two “Morgans.”
Moreover, if you mean JPMorgan/Chase, then the total amount of its recent loss is reported to be $5.8 billion and falling dominoes.
As usual, look for a second post early Wednesday afternoon. And please don’t blame us if events or technology overtake us. This entry is cross-posted on the Rundown– NewsHour’s blog of news and insight.