By 24/7 Wall St.

Filed under: Investing

J.P. Morgan Management Downgrade

J.P. Morgan Chase & Co. (NYSE: JPM) suffered another blow to its reputation, as a government agency downgraded its rating of the financial firm’s management. What that means for the bank from a practical standpoint may be little. The Office of the Comptroller of the Currency lowered its rating on J.P. Morgan to a level that indicates heightened concern about Jamie Dimon, his key aides and the board. But if the ratings change has no consequences, why should the government bother at all. According to The Wall Street Journal:

The New York company’s management rating from the Office of the Comptroller of the Currency fell one notch last July to a level that signifies oversight “needs improvement,” following the revelation of what are known as the “London whale” trading losses, said people familiar with the regulatory assessment.

Grading is on a scale of 1 to 5, with 5 being worst. J.P. Morgan had been at level 2, indicating “satisfactory management.” The people said the downgrade to level 3 wasn’t solely related to a London employee’s large trades—in indexes tracking the health of a group of companies—that led to losses exceeding $6 billion.

South Korea Hacked

Worries have heightened again about unfriendly governments. The U.S. government has accused China of hacking American companies, and potentially parts of the federal government, as a mean to gather data or disrupt Internet operations. South Korea, a major U.S. ally, said that its media and banks have been broken into, probably by North Korean interests. The tension between the two neighboring nations has risen sharply over the past several months. According to the Telegraph:

Authorities in Seoul were not immediately able to pinpoint the cause of the system failures and the national security office declined to speculate on where the attack may have originated, although suspicion immediately fell on North Korea.

“Reports have been made simultaneously, so we have dispatched investigators to the scene,” an official in the National Police Agency‘s cyber-terrorism department told Yonhap News.

National broadcasters KBS, MBC and YTN reported shortly after 2pm that their computer networks had inexplicably come to a complete halt. Editing equipment had also been affected, affecting broadcasts. Shinhan Bank and Nonghyup Bank reported that their systems had also been affected at the same time.

What’s Next for Cyprus?

The debate over what will happen to Cyprus quickened as a rescue by the European Union, European Central Bank and International Monetary Fund appeared to fall apart after the small country’s parliament rejected plans to “tax” the savings accounts of most of it citizens. The EU does not want Cyprus to default, which would serve as proof that Europe still cannot manage its own financial matters. But another bailout of a country that almost certainly will never return to prosperity raises the chance there will be a precedent for future solutions to problems in nations such as Greece and Spain. Bloomberg reports:

Germany and its euro-area allies maintained pressure on the island’s politicians today to raise a planned 5.8 billion euros by drawing …read more
Source: FULL ARTICLE at DailyFinance