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News Tip: No Need for More Regulation in Aftermath of JPMorgan $2 Billion Loss
Executive director of the Center for Financial Excellence, Duke University's Fuqua School of Business
Gardner, who joined Fuqua in 2009, worked from 2003 to 2009 at Cerberus Capital Management, L.P. in New York City, where he was a managing director in the private equity group and responsible for sourcing, evaluating, structuring and negotiating private equity transactions.
"It does not appear that the losses incurred by JPMorgan Chase (JPM) were caused by reckless risk-taking. The hedge was intended to reduce risk. The fact that it failed is not, by itself, a systemic issue.
"Absent evidence suggesting that JPM knowingly flouted prudential risk management practices, we should refrain from reflexively citing a poorly designed and executed hedge as a call to arms for more regulation. Sometimes even well-intentioned people just get it wrong and no refinement of regulation can prevent that from happening again."