Too brave to put a high risk in the derivatives up to a big bank in the United States (U.S.) loss of billions of dollars, have to blame anyone? Surely, the first taxable trader pointed the finger is JP Morgan Chase & Co.
But, that should be observed is what drives their motivation to take the extra risk? In this case, Fortune review that the main culprit is the low interest rate policy that The Federal Reserve (Fed / U.S. central bank).
The central bank's policy is escorted Ben S Bernanke is believed to make the banking industry are competing to make up for revenue lost due to the small yield because it refers to the fed funds rate.
Thus, allowing the executive retreat as did JP Morgan in the morning is not quite fair in this case. After all, who do these bankers continue to breed millions of dollars intended for the benefit of JP Morgan.
They just keep printing money to try and rebalance the market position of dislocations created by the big banks.
Outside bets on the table Wall Street, pass the blame on the Fed for losses of 2 billion dollars is probably pretty far, but it is based.
Policy of low interest bank automatically make profits contracted for forcing banks to take greater risks in order to obey the request of shareholders. Shareholders, the bank has always demanded a great performance, whatever happens in the market.
This is often brought up by JP Morgan CEO Jamie Dimon. Everything is permissible for the breeding of money quickly. Fed policy lately considered to provide constraints for banks to lend normally.
However, banks also can not be separated from the error derivative. Bank which should have benefited from the savings and loan, it acts as a hedge fund. Indeed, the extent of operational savings and loans to banks too boring and not too big a profit as low interest rates. But this relieves them of greater losses.
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