The chief executive of JPMorgan Chase — America's largest bank — revealed Thursday that the bank recently lost $2 billion in the same complex, risky trades that helped bring on the 2008 financial crisis.
Jamie Dimon called the bank's actions an “egregious mistake” and embarrassing.
Shares in JPMorgan fell nearly 7 percent in late trading Thursday. Other bank shares were also sharply lower.
The complex trades by JPMorgan, known as hedge funds, act like an insurance policy so investors are protected if the market loses value. But recent rises and drops in stock market led to losses.
JPMorgan had previously avoided such risky investments, allowing it to emerge from the 2008 financial crisis relatively unscathed.
In better economic news, the United States has posted its first budget surplus in almost four years.
The Treasury Department said Thursday the country took in more money last month than it spent for the first time since September 2008, just before the recession.
Americans pay their yearly taxes in April, so an increase in revenue is not unusual. The country is also expected to post another trillion-dollar deficit this year. Some economists believe the first surplus in nearly four years is a sign the U.S. economy may be coming back to life.
The government also said Thursday that the U.S. trade gap widened in March, with the country importing more goods than it exported.
It says the $52-billion increase in the trade deficit is a 14 percent jump over February.
Officials cite higher prices for imported oil and a greater demand for foreign-built computers, cars, televisions, cell phones and clothes. U.S. trade with China accounted for about 40 percent of the overall American shortfall.
In a separate report, the government said the number of first-time claims for jobless benefits was slightly lower last week from the prior week. Analysts said the level of initial claims for unemployment compensation signals that the U.S. is poised for modest job growth.
The U.S. jobless rate dipped in April to 8.1 percent, but partly because some people out of work stopped looking for jobs and were not counted in the monthly employment survey.
