New York - AFP
US banking giant JPMorgan Chase said Monday it was suspending its share repurchase program, after its embarrassing disclosure of more than $2 billion in losses in the derivatives trade. \"We intend to restart it, but we need to box this thing first,\" said JPMorgan chief executive Jamie Dimon in a conference call with analysts. On May 10, the prestigious Wall Street bank shocked investors in revealing a $2 billion loss in derivatives trading over just six weeks and said an additional $1 billion loss was possible by the end of June. The massive losses have raised questions about the largest US bank\'s internal controls and regulation in the financial system that was at the center of the deep 2008-2009 recession. Dimon did not suggest that regulators had pressured the bank to suspend the share buybacks, but clearly framed JPMorgan\'s decision as being in the spirit of seeking to meet financial guidelines. \"We made a commitment to ourselves and to regulators,\" he said. \"They were quite clear that companies like us have to pass a stress test, which we did, and you have to be without stress... and on a glide path to get into where you need to be with Basel 3,\" the tougher global regulatory framework. Two factors had led to the buyback suspension. For one, he said, \"Obviously we\'re not going to make as much money.\" And secondly, he acknowledged, the bank will have to hold more risky assets on its books. In March, JPMorgan announced that it had passed the Federal Reserve\'s so-called \"stress test\" determining it had the financial capacity to weather a sharp recession, allowing it to raise its dividend and move to buy back up to $15 billion in shares, including $12 billion this year. Dimon noted that the bank still intended to pay a dividend to shareholders. Shares in JPMorgan were down 1.3 percent in late morning trade in New York, while the overall market was higher.