A BIG FINE

The rumour is that J.P.Morgan will pay a fine to the U.S. Justice Department of US$13 billion in order to settle investigations into its mortgage-backed securities business. If true, this would be the biggest settlement ever paid by a U.S. company.

I have three comments on this. First, US$13 billion is a lot of money; writing it out in full (US$13,000,000,000) makes that clear. It's more than the gross national product of a number of countries.

Secondly, it refers only to the mortgage business. The bank has already paid fines in respect of other parts of its business, one for US$1 billion only last month. Other parts of the business are still being investigated.

Thirdly, it confirms the impression I got from reading Too Big To Fail, the account of the financial crisis. Namely that the people who ran (and still run) one of America's biggest financial institutions had no idea what they were doing.

Walter Blotscher