Fitch described the financial impact on JPMorgan as "manageable," but said the scale and and "ongoing nature" of the trading activity that led to the loss "implies" a lack of liquidity at the lender. Fitch cut JPMorgan's long-term issuer default rating from A+ to AA- and trimmed its short-term rating from F1+ to F1. It placed the New York company on review for possible future downgrades.
"It also raises questions regarding [JPMorgan's] risk appetite, risk management framework, practices, and oversight; all key credit factors," Fitch added in statement. "Fitch believes the potential reputational risk and risk governance issues raised at JPM are no longer consistent with an 'AA-' rating."
Despite the downgrade, Fitch said JPMorgan has enough capital to absorb the loss and that the bank's capital cushion "compares well" with that of other global banks.
that its Chief Investment Office unit had racked up the loss, which stemmed from trades in credit protection on corporate debt.