The lender’s long-term issuer default rating was cut to A+ from AA-, and the short-term grade was lowered to F1 from F1+, Fitch said today in a statement. Fitch also placed all parent and subsidiary long-term ratings on rating watch negative.
JPMorgan announced the loss linked to synthetic credit securities yesterday. The firm’s chief investment office took flawed positions on the instruments that remain volatile and may cost an additional $1 billion this quarter or next, the New York-based bank’s chief executive officer, Jamie Dimon, told analysts.
“The magnitude of the loss and ongoing nature of these positions implies a lack of liquidity,” Fitch said. “It also raises questions regarding JPM’s risk appetite, risk management framework, practices and oversight.”