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Morgan is one of the worlds leading world-wide coronation banks, with the client from corporations, governments, states, municipalities, healthc atomic number 18 organizations, educational institutions, banks and iinvestors sector around the world. It is also hale known for providing Securities Services, Asset Management, commercial-grade Banking, Private Banking and treasury services.These different financial services are offered to their customers maintaining an ethical standard as well as having employee commitment in the workplace. It is much(prenominal) kind of financial service provided that is committed to optimize efficiency, ebb risk and enhance revenue with is valued assets. Despite of being much(prenominal) a reputed company for such a long time the in May 2012 they incurred liberation of 2billion USD in the first quarter. Besides these, they are also assuming that this pass with increase by another $1 billion in the countenance quarter. After incurring the loss their share piece unhorses by 7% a day.They fall down from Credit Rating (AA-). They lose the food market and customers satisfaction. Few institutes are investigating on such loss in the financial market. The U. S. Security Exchange Commission is having a preliminary investigation into JPMorgans news report practices and public disclosures about the trading loss. Besides these the U. K. s Financial Services Authority examined the role capital of the United Kingdom employees played in the loss. In the force out, one of the executive of the bank claimed that the loss was originated from he firms Chief investing Office (CIO).The Wall Street Journal reports a trader at J. P. Morgan known in the market as the London Whale made large bets on credit derivatives. Iksil utilize a little-known index of cxxv firms CDX IG 9, which iincluded the Campbell Soup Company and Walt Disney. They based their estimates on the trades and price movements of credit default swaps complex instruments used as a type of insurance against companies defaulting they witnessed as well as their understanding of the size and twist of the markets. J. P. Morgan says his unit is meant to hedge structural risks.The failed hedge likely involved a bet on the flattening of a credit derivative curve, part of the CDX family of investment grade credit indices, said two sources with knowledge of the industry, nevertheless not directly involved in the matter. JPMorgan was then caught by sharp moves at the long end of the bet, it said. The CDX index gives traders exposure to credit risk across a range of assets, and gets its value from a basket of individual credit derivatives. In essence, JPMorgan made a series of bets which turned out very, very adly. trademarked trading, using their own cash to take bets on financial markets. The 2007-09 financial crisis originated in the declination of traditional home mortgage lending, as opposed to banks short-term trading of exotic financial instruments for profit. branded trading has a bad image because its so easily likened to gambling. The JPMorgan trading losings come at a difficult time for the international banking system as it faces up to risks linked to the Eurozone debt crisis and international sparing uncertainty. J.P. Morgan lost the money by betting its own capitalalbeit while hedging risks much of the give-and-take since the news has been on the Volcker regularization, which bans banks from trading for themselves rather than their clients. JP Morgan started buying share for their own rather than their clients. So when the rule is announced then they fall in big trouble. This is also led them to incur the huge loss. In a conference call disclosing the problem on Thursday, Dimon said the $2 billion in losses could rise by a further $1 billion.However a 2 billion dollar loss for JP Morgan is nothing compared to their original exposure of over 70 trillion dollars. Overall, the 9 largest U. S. banks have a total of mor e than 200 trillion dollars of exposure to derivatives. That is approximately 3 times the size of the entire global economy. So lets not make too much out of this 2 billion dollar loss by JP Morgan. This is Just a preview of coming attractions. Soon enough the real problems with derivatives pass on begin, and when that happens it will shake the entire global financial system to the core.