
Legal risk 63
䊏 One of the reasons why financial institutions have been particularly alerted to this
issue is that the regulatory authorities are demanding action.
䊏 But in all likelihood, the real background factor is their own business sense. At long
last they appreciate that the risks they have taken may no more be controllable.
Today, some big banks have a derivatives exposure which runs into trillions in
notional principal amounts. At JP Morgan Chase, it is said to stand at $26 trillion; at
Deutsche Bank, at $13 trillion; Citigroup and Bank of America have each nearly $12
trillion. While not all of notional principal is toxic waste, even demodulated ...