The $6 Billion Excel Error
How JPMorgan Lost $6 Billion to a Copy-and-Paste
In 2012, JPMorgan Chase — the largest bank in the United States — lost over $6 billion because of a spreadsheet typo. An employee had copied and pasted the wrong data, accidentally dividing a metric by a sum instead of an average. The bank trusted its reputation to shield it from risk, while its actual safety net was a fragile spreadsheet operated by a tired analyst.
What Happened
In 2012, JPMorgan Chase’s Chief Investment Office in London was using a bespoke Excel spreadsheet to calculate the bank’s Value at Risk (VaR) — the metric that determined how much capital JPMorgan needed to hold against potential trading losses. A junior analyst had been copying and pasting data between spreadsheets. In one critical formula, the analyst had divided a sum of values by the total count (an average) instead of dividing by just two specific cells (a sum). This simple copy-paste error meant the VaR model was reporting risk at roughly half its actual level. The “London Whale” trading position grew to $157 billion because the flawed model said it was safe. When the trades went wrong, JPMorgan lost $6.2 billion — all because of one wrong Excel cell reference.
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