Get out of Whale fee

JPMorgan's management failings beggar belief. Many of the gory details of the London Whale trading loss were already known. But US and UK watchdogs have given the most jaw-dropping account yet of how the bank mismanaged the trading book, botched its response to the crisis and misled its regulators.

Those who read both JPMorgan's own account of the sorry affair as well as the US Senate's report will already know about some of the shenanigans involving the chief investment office, which mismarked trading positions for its rotten synthetic credit portfolio and fiddled risk metrics.

The reports out Thursday, though, add more detail about what JPMorgan traders initially thought was an appropriate way to handle the problem, which managers first described as a crisis in March 2012. One plan they considered was not simply to shrink the bet, but to manufacture a $20 billion-dollar saving in risk-weighted assets simply by tweaking models.

Whale aficionados also now have more information on just how ineffective JPMorgan's compliance staff were at monitoring their traders. JPMorgan's senior management did not inform the relevant back-office department in London that it was reviewing the valuation of the Whale portfolio for over a fortnight. Given recent rogue trading incidents at Societe Generale and UBS, the low regard in which the control function at the bank was held is extraordinary.

Worst of all, communication didn't just break down internally. JPMorgan executives failed abysmally to keep both its board and its regulators in the loop. The UK's Financial Conduct Authority describes how it took more than a month for it to learn about the bank's internal review and the potential misconduct of traders. The FCA today also concluded that it had been "deliberately misled" on one occasion.

The SEC, meanwhile, has exacted an admission from JPMorgan that it withheld information from its audit committee. Without that data, the bank's board was flying blind. The four watchdogs' reports reinforce how the bank repeatedly failed to spot and deal with the crisis at every level of management. Chief Executive Jamie Dimon may have managed to keep his chairman's role. But he cannot afford any more missteps.