JPMorgan Chase and the London Whale A Written Analysis by Risk Type: Credit, Market, Liquidity, Operational, and Compliance/Conduct Risk
Table of Contents 1. Introduction: Reading the Case Through Five Risk Lenses
3.1 The Synthetic Credit Portfolio as a credit risk transfer instrument
3.3 Counterparty credit risk and the collateral dispute evidence
3.4 Realized credit events and Expected vs. Unexpected Loss
4.1 Basis risk: the hedge that stopped matching what it hedged
4.2 Value-at-Risk: definition, and the January 2012 model change
4.3 Other market-risk metrics and their breaches
4.4 Duration, convexity, and non-linearity
4.5 Market impact: when a trading desk becomes the market
5.1 Funding liquidity: never at risk, and part of the root cause
5.2 Asset liquidity: the real liquidity story of this case
5.3 Liquidity risk controls that were present, and the one that was missing
6.1 People risk: unqualified and non-independent staff in critical control roles
6.2 Process risk: bypassed model validation and unenforced risk-limit protocols
6.3 Systems risk: a model with "formula and calculation errors"
6.4 Mismarking as a control failure, not just a market-risk symptom
6.5 Capital treatment and consequences
7. Compliance and Conduct Risk
7.1 Market conduct: the CFTC manipulation finding
7.2 Compliance risk: regulatory reporting and the OCC relationship
7.3 Misleading public and investor disclosure
7.4 Consequences: the regulatory and legal response
7.5 Risk culture as the shared root of the compliance/conduct failures
Compliance/conduct risk verdict
8. Cross-Risk Synthesis: Why the Categories Cannot Be Read in Isolation
8.2 Risk-type synthesis matrix 8.3 A brief comparative note