JPMorgan faces derivatives regulation hit

For a bank that weathered the financial crisis better than most of its peers it might seem slightly incongruous that JPMorgan should suffer the most from regulation aimed at curbing past excesses.

The biggest counterparty in the OTC derivatives market last month gave the first indications of how proposed regulation of derivatives traded outside exchanges could affect revenues. In a briefing with Sanford Bernstein banking analyst John McDonald, JPMorgan’s investment bank chairman Steve Black said the firm would face earnings headwinds if lawmakers had their way and moved trading of OTC derivatives such as interest rate swaps and credit default swaps onto exchanges.