JPMorgan discloses wider probes of hiring, currency trading

REUTERS - JPMorgan Chase & Co , the biggest U.S. bank by assets, disclosed on Friday that the U.S. Department of Justice and agencies from other jurisdictions are investigating hiring practices in Hong Kong that were already being probed by the U.S. Securities and Exchange Commission.

The company also said that it is being questioned about its currency trading by various authorities, which are in the early stages of their investigations.

Other big banks have made similar disclosures recently about probes of possible manipulation of foreign exchange rates.

JPMorgan also gave more details about U.S. government investigations into the bank's relationship with convicted Ponzi schemer Bernie Madoff. Two government offices, the U.S. Attorney's Office for the Southern District of New York and the Office of the Comptroller of the Currency, are currently looking into the ties between Madoff and the bank.

The U.S. Attorney's Office for the Southern District of New York is also investigating the bank's activities in the California and Midwest power markets that were the subject of a $410 million settlement between JPMorgan and the Federal Energy Regulatory Commission.

Additionally, the bank offered more specifics on the amount of claims that investors and bond insurers had over mortgage-backed securities. Total claims added up to approximately $117 billion, $88 billion of which involves Bear Stearns, Washington Mutual, JPMorgan or its affiliates as an issuer and $29 billion of which involves the entities solely as underwriters.

The company made the statements in a quarterly filing with the U.S. Securities and Exchange Commission.

(Reporting by David Henry and Peter Rudegeair in New York; Editing by Phil Berlowitz)

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Six major central banks make currency swap accords permanent

By Leika Kihara

TOKYO (Reuters) - Six major central banks said on Thursday they would make their web of currency swap arrangements permanent as a "prudent liquidity backstop" in case of future global financial strains.

The Bank of Japan, U.S. Federal Reserve, the European Central Bank, the Bank of England and the central banks of Canada and Switzerland will convert their "temporary bilateral liquidity swap arrangements" into standing arrangements that "will remain in place until further notice".

"The existing temporary swap arrangements have helped to ease strains in financial markets and mitigate their effects on economic conditions," a coordinated statement from the central banks said. "The standing arrangements will continue to serve as a prudent liquidity backstop."

Currency swap lines were first introduced nearly six years ago in response to a global credit crunch that starved banks of liquidity and threatened to gum up the entire financial system.

They were an important part of the policy response to the 2007-2009 financial crisis, keeping a lid on funding costs which had spiralled due to fear over counter-party risk.

The arrangements were next due for review in February.

Speaking after the BOJ kept its massive stimulus programme in place, Governor Haruhiko Kuroda said the structure had helped bring stability to financial markets and the move to make it permanent did not denote any new alarm about liquidity.

"We decided to make them permanent to avoid uncertainty as they were due to expire next February," Kuroda told a news conference. "We have no plan to extend the swap arrangements beyond the six central banks."

(Writing by Mike Peacock; Editing by John Stonestreet)

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