Reuters: Financial Services and Real Estate: JPMorgan trading loss a credit negative - Moody's

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JPMorgan trading loss a credit negative - Moody's May 14th 2012, 15:37 NEW YORK | Mon May 14, 2012 11:37am EDT NEW YORK May 14 (Reuters) - Moody's Investors Service on Monday said JPMorgan Chase & Co's $2 billion trading loss announced last week is a negative development for the bank's bondholders. JPMorgan's credit rating of Aa3, firmly ensconced in investment grade territory, is on review for downgrade, along with other major global financial institutions and Western European banks. "This development is credit negative" for JPMorgan bondholders, Moody's said. "This nasty surprise from one of the better managed banks once again highlights the opacity of the risks of global investment banks, as well as the difficulty of controlling these risks," Moody's analyst Peter Nerby wrote in the firm's Weekly Credit Outlook report. On Thursday the bank disclosed the $2 billion trading loss, citing a failed hedging strategy. This development will be included in its current rating review, but in itself does not mark any change to its current status.

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