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Some official scrutiny of JPMorgan's risk management comes better late than never. Two U.S. watchdogs have put the bank on notice following last year's $6-billion (U.S.) "whale trade" loss in the company's chief investment office. The regulators may be late to the game, but they're right to focus on improving how complex banks are managed.

Chief executive officer Jamie Dimon has tried to put the embarrassing episode behind him. In May he said he wanted to learn from the costly mistake, fix it and move on. He tossed out Ina Drew, the veteran who ran the CIO, replaced his finance chief and launched an internal investigation whose findings will, according to news reports, be released to the board on Tuesday. The company's quarterly earnings are due on Wednesday.

But Mr. Dimon isn't being allowed to forget the incident just yet. The Office of the Comptroller of the Currency and the Federal Reserve's orders, issued on Monday, require JPMorgan to tighten controls at the once sleepy CIO, the unit charged with protecting the bank's $2.3-trillion balance sheet from exogenous events. The regulators are appropriately asking for stronger board oversight and a plan that will prevent employees from creating whale-sized losses.

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That should help avoid a repeat of boneheaded trades in credit derivatives last year, not to mention the use by one trader of dodgy valuations that forced a restatement of earnings. JPMorgan has more than $400-billion of deposits it isn't lending out and needs to manage and that's a task that falls partly to the CIO, so oversight still matters.

It's true that watchdogs have a poor record when it comes to spotting trouble before it erupts. They did very little to rein in excesses leading up to the 2008 financial crisis, and seemed to have been painfully out of the loop when JPMorgan first disclosed its losses last year. But a firmer hand from the OCC and the Fed is welcome all the same. Mr. Dimon won't relish the extra box-ticking burden, but the egg still on his face is a reminder that risks at giant banks are hard – perhaps impossible – for one person to keep control of. Another set of eyes could even help.

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