London whale betrays an elephant still in the room


The JP Morgan case demonstrated clearly the continuing huge scale of some of these major prop desks

By Neil Wilson

In early May, the markets were astonished to learn of an estimated $2 billion trading loss incurred by the so-called ‘London whale’ – due to some ill-judged activity on a proprietary trading desk, based in London, operated by JP Morgan.

The news was indeed surprising on a number of levels. JP Morgan was, rightly, seen as one of a select few leading banks that came through the financial crisis relatively unscathed, and with a reputation for sound risk management further embellished. Furthermore, JP Morgan had been one of the leading pioneers