JPM’s surplus liquidity problem… May 19, 2012 at 8:11 pm
…was huge. Really huge. The FT reports that JPM’s CIO
has built up positions totalling more than $100bn in asset-backed securities and structured products – the complex, risky bonds at the centre of the financial crisis in 2008.
These holdings are in addition to those in credit derivatives which led to the losses and have mired the bank in regulatory investigations and criticism…
The unit made a deliberate move out of safer assets such as US Treasuries in 2009 in an effort to increase returns and diversify investments. The CIO’s “non-vanilla” portfolio is now over $150bn in size.
Just when you thought it couldn’t get any worse. They own
more than £13bn (or 45 per cent) of the total amount of UK RMBS that has been placed with investors since the market re-opened in October 2009,” the BBA said.