JPMorgan Chase & Co.'s $2 billion trading loss has prompted the Federal Reserve Bank of New York to examine how banks in its district are managing a wave of deposits that has flooded the financial system since the credit crisis, Bloomberg News reported yesterday. New York-based JPMorgan's trading loss, announced last week, occurred in its chief investment office, which oversees about $360 billion, the difference between deposits and what the bank lends. The New York Fed is investigating how other banks it regulates are investing deposits that are not loaned out. Total deposits at institutions insured by the Federal Deposit Insurance Corp. rose to about $10.2 trillion at the end of last year from $8.2 trillion in the third quarter of 2007. In the same period, total loans fell to $7.5 trillion from $7.7 trillion. Securities in bank portfolios rose to $2.9 trillion from $2 trillion, according to FDIC data.
