Carl Levin

The Model Review Group required only limited backtesting of the new model. . . . That is No. 1. It was critical of that limited backtesting.

Did you know that these limits were supposed to be reviewed every year?

A large jump in risk limit breaches is a worrisome pattern.

I do not know why those reports suddenly were not sent.

Did the London traders have to get approval of the CIO risk managers like you to put on positions?

We will have 12-minute rounds, if that is OK.

The individual trades, the positions they were taking, they did not get your approval.

Thank you very much.

There was no relationship between the fact that the losses were piling up and that there was a way in which the marks were made to reduce the impact of those losses on the books.

Well, the math may work out for you, but the question is whether or not that is what you said, and we will find out more about that.

I would have considered that is the wrong thing to do.

Shifting the pricing practices to minimize losses is not acceptable.

I think your answer was inaccurate.

How do you possibly justify changing your process of making marks in order to make your losses go away or be less?

Is it common inside JPMorgan to change your pricing practices when the losses start piling up in order to minimize the losses?

I think this is separate from the reserve. I think the losses as reported here on this chart were $719 million.

Were you aware of the fact that it had not been reviewed every year?

Not to my knowledge about OCC.

But were they caught at the OCC?

We had some concerns about overall governance and transparency of the activities.

Is it not true that when a derivatives portfolio gets to be that big that there is a special danger?

The Whale Trade issue is considered closed--email went out to Senior Management yesterday.

Now, rather than identifying risks to be offset, are you also going to identify the assets to be offset?

Do not put it in emails.

So much for accuracy.