Preventing another "London Whale."
Citigroup analyst Keith Horowitz on Tuesday, following a meeting with the company's new Co-Chief Operating Officer and Operating Committee member Matthew Zames, said that "one clear takeaway from the meeting is investors remain concerned about risk [management] and lack the ability to 'trust' [that] JPM is not harboring other unseen risks." According to Horowitz, "Zames emphasized JPM's renewed commitment to 'empower' independent risk managers in the CIO, increase transparency, and hold the Corporate segment to more rigorous standards that have long been in place in the Investment Bank." Horowitz said that his firm believed that "the failure in the CIO was simply an oversight due to lack of focus," and that although it was "a painful and costly mistake, lessons have been learned, processes have been rectified, and the CIO operation will be very differently managed going forward." "Despite the large size of JPM's balance sheet, we believe [management] has their arms around key risks, and ironically after this issue now have greater confidence in JPM relative to peers," Horowitz said.