Thank you for joining us, early in the morning. Key announcement, please turn off your cellphones. All materials are now available on our website. We will open the floor to Q&A at the end of the presentation. During the Q&A session, a few things that will be important, because some of the people are in the room, please wait for the microphone, and say your name to make sure that the people on the phone know who is speaking. Please be cognizant of others in terms of follow-ups, if you have several follow-ups we may have to come back to you towards the end. And then, we’ll go to questions through the telephone, and last point we know that Wells Fargo is having their call at 10. We have set up a room, it’s 207 on this floor, and a few breakout rooms for those who want to listen from here. With that, are we on in terms of the audio? Please take a look at the forward-looking statements, and I’m going to turn it to Jamie.

Sarah, thank you very much. I appreciate you all coming today. So, we have a whole bunch of presentation to take you through. And I’ll start with me; I’ll try to cover some of the high points. Unfortunately, I think you might have seen this morning that we announced a restatement of the first quarter. Doug will describe it in detail, and Mike, we don’t take it lightly. We talk to our best advisors, accounting and legal and try to do what we thought was right, and the most conservative thing to do. Hopefully, this is what the SEC Chairwoman herself would have done, if she’d seen all the same facts at the same time. Today, I’m going to cover, just give you a quick overview. I’m going to talk about a whole bunch of significant items in the quarter, which we break out pretty right in the front of the press release, give you an update in the synthetic credit portfolio, talk a little bit about treasury and CIO, there are some questions about it, so we’re going to try to answer some of those, our capital plans. I’m going to turn over to Doug, who is going to take you through, what we call the regular earnings presentation that has got a slide more of disclosures. And then Mike will give you an update in the CIO taskforce, it’s kind of anatomy of the problem, all the good, the bad, the ugly of it. The review is continuing, I should point out. It’s been guided by the Board, and if we find out more, if so possible, or more anything different or material, will let you know as appropriate. And we do find out more, we will do the right thing as we always try to do. One…

Thanks, Jamie. So I’m going to go through the earnings stats, so if you turn to that on page 1. Jamie really covered this page, just to highlight, $5 billion of net income, $1.21 per share. We did announced this morning that we’re restating our first quarter earnings as Jamie said. The restatement is really based upon recent facts that we’ve uncovered regarding the CIO traders’ intent as they were marking the book. And as a result, we questioned the integrity of those trader marks. We felt as a result of that, it was both prudent and a conservative approach to restate our first quarter. We’ve also as a result of that determined we had a material weakness in CIO’s internal controls over the valuation of the synthetic credit portfolio as of March 31. We believe however, we’ve substantially remediated that weakness at the end of the second quarter. Mike is going to provide the details and how we uncovered trader intent. From a financial point of view, let me give you four facts and then we are going to move on. The first is, the loss of the portfolio prior to the restatement for this quarter would have been $5.1 billion, after the move to $4.4 billion in total year-to-date $5.8 billion in losses. Second, we effectively moved $460 million after-tax to the synthetic credit portfolio from the second quarter into the first. Third, year-to-date earnings $241 million unaffected by the restatement, restated earnings of $1.19 in the first quarter, $121 million in this quarter effectively a move of $0.12 approximately per quarter. And then the last, as Jamie said, year-to-date revenues, year-to-date net income, year-to-date capital, year-to-date balance sheet are not impacted by those statement. So with that, let me turn you to page 2. And I want…

I have to say that it’s been an incredible effort by many people and I just to thank everyone who has been involved in getting this work done, to get it here. So now what I am going to is go through this presentation in three sections. First, we’re going to spend a bunch of time just walk you through some facts. Then we will go through observation and implications of those facts. And then finally, I’ll bring it to close with the remediation actions that we’ve taken in response to all of this. So if you start, let’s begin on slide two and that is just a summary of the key findings of the review. So there are five key observations, the first is the actual cause of the losses, and the other observations are things that had we’ve done them better, may have reduced the size of the losses allowing us to detect issues earlier. So the first one, which is the cause is that, CIO judgment, execution and escalation were poor in the first quarter. Second, the level of scrutiny of CIO did not evolve, commensurate with it’s increased complexity. Third, a dedicated risk management team supporting CIO was ineffective in dealing with the challenges of this portfolio. Fourth, risk limits in CIO were not granular enough. And fifth, that’s the model, the approval and implementation of a synthetic credit VaR model that we talked about, it happened in the quarter was poorly done. So with that overview of these observations, now let’s slowly go through the pertinent fact that these support. So on slide 3, some of the historical contexts on synthetic credit portfolio itself. So the portfolio’s primary purpose had been to provide a partial offset for losses we would suffer elsewhere in CIO and…

Thanks Mike. So let me say a word about Ina Drew. I have enormous respect for Ina as a professional and as a person she has made some incredible contribution to this company. But she has decided to retire, I got several letters from former chairman, who talked about her contribution, one even said she saved the company, in his judgment. From my experience she has acted with integrity and tried to do what was right for the company at all times and (inaudible) part of those mistake, and I believe that’s true here as well. In that spirit, Ina came forward in order to give up a very significant amount of her past compensation, which is equivalent to the maximum clawback amount. So with that let’s turn it over to Q&A. Glenn Schorr – Nomura Securities Co. Ltd: Glenn Schorr from Nomura. Thank you very much. That doesn’t count as a question, right? So in the past couple of Investor Days you’ve shown us some slide on the earning power of the firm being in the range of $24 billion, pretty buyback over the cycle earnings. Curious on post this CIO related changes, how you think about that. I do appreciate that you’ve showed us $2 billion over the last four years in the credit portfolio earnings. Is that it? Is that how we should think about it?

Yeah, this just not affect the earnings part of the company at all. So the $24 billion still be accurate and probably show those numbers, we didn’t [firm] up there. We could probably show you the numbers, almost the same as showed you last time, there were lot of guys, where we’re today minus the burden and mortgage. Glenn Schorr – Nomura Securities Co. Ltd: Okay. So no other big changes to the investment philosophy in CIO. Okay. Good, thanks. On the European exposure side that you have in one of the slides, I guess I’m looking for a net confidence or net takeaway. Has the situation in Europe gone any better because that hasn’t from a lot of people’s view and then maybe your level of confidence around your exposures, hedges and what you’re doing behind the scenes to potentially prepare for the potential [denominations]?

So we think we’ve been fairly consistent. We think, we kind of have the rollercoaster ride here. And you see progress in a two steps forward, one step back. We still think, we’re going to model through that may not be in the former fashion or the time table roll to prefer. The numbers up there, we went from $12 billion to $6 billion of net exposure. We think that’s a rather good number, and the stress test, we think our risk goes and we talked about a potential loss of $3 billion in a bad scenario. It could be worse and a complete extreme scenario like pulling apart the whole European Union. The important thing, we’ve continue to conduct business there. We have a lot of clients in Italy, Spain for 100 years or so, and we are doing that carefully. And obviously, we’ve been doing more hedging of the exposures there and that decision we make periodically over time. Glenn Schorr – Nomura Securities Co. Ltd: Okay, last one. Maybe I don’t know if there is a point of clarification because I think everyone appreciates the full run-through and disclosure on the CIO. But coming into today, I was saying well, it would be great if they kick, I mean, what the loss was, what they think the expected loss is, and what percent is gone or left. You’ve got us on the loss side. You’ve got us on the full run-through. But I’m not sure, I’m clear on what’s left, how much of it’s gone or how much it’s still with you? Thanks a lot.

We showed a lot of numbers, so the risk itself was down two-thirds, 70%, 80%. So it depend on how you measure it through IV, it doesn't have to lose money at all. And it’s at the extreme stress scenarios, simulated stress scenarios, which we – in a euro crises, a credit crunch, a 99.9% statistical analysis, could be as high as $1.6 billion or $1.7 billion. That’s one thing we expected and I’d be surprised we’ve got that through.

Matt O'Connor. Matt O'Connor – Deutsche Bank Securities: Matt O'Connor, Deutsche Bank. I’m going to ask the same question, Glenn started off, just as we think about longer-term earnings power, I mean, how can we completely ignore those some profit from the macro hedges, there should be some de-risk in the securities book? So I kind of want to ask the same question again and trying to get some number on that.

There was $2 billion of profit in this book over a four, five year period. We didn’t assume any of it going forward at all, so it's not like we take a lot of risk in extremely big projects, we were not. So it was not in our numbers, it doesn't change the $24 billion or anything like that. We met de-risking the AFS portfolio it's about – and we’re still investing about $350 billion at a 2.6% yield, and you can go by Ginnie Mae and Fannie Mae, and say it’s 3.25. So you could easily extend duration with very short duration, extend duration, earn more NII. I think the portfolio is actually conservative will be a source of higher earnings, if – in one ways go up. So this will not affect the earnings power of the company at all. Matt O'Connor – Deutsche Bank Securities: And as we think about the core businesses and specifically the Investment Bank, I mean you’ve talked about looking through rechecking all the risks, bringing down some limits potentially. Will we see any of that impact going forward?

The Investment Bank is doing what they’re supposed to do. We’ll not ask to take them any other risks, because it took some synthetic credit. They are going to manage synthetic credit, it’s just what they do, but the rest of the business is running exactly where it was before. And they constantly manage their own risk exposures. Matt O'Connor – Deutsche Bank Securities: And then separately, I don't know if this is – if you can say, I think specific to judge more again or just overall, but LIBOR obviously has been in the news quite a bit. If there is anything that you can say or even when will we know what we don't know instead of time-to-time or…

All I can say is like all of these things, there are a lot of people doing exams, we’ll be open total openings regulators and investigators. And the other thing I’d be a little patient if I were you and not every thing is the same, it’s going to take a while and not all companies are in the same position.

Betsy Graseck.

And we couldn’t make too many assumptions at this point. Betsy Graseck – Morgan Stanley: Hi. Betsy Graseck, Morgan Stanley. So two questions, one on capital, you indicated that you think you’ve got a strong trajectory to 9.5%, we're getting two numbers from starting point there, either it’s the starting point of 9.1 plus litigation or 7.9, which one are you referring to?

Yes, it was 7.9 as we’re still facing everything upfront. Betsy Graseck – Morgan Stanley: All right.

What we say with the nine as you actually fully fade the runner-up stuff and some of the models that we’re going to do. We would get another 1.9 within the next two years. So I’m just trying to show apples-to-apples. Betsy Graseck – Morgan Stanley: So 9.5 that you’re saying is on trajectory too is by what timeframe?

That 9.5 is the end of 2013 and it was like 10.5 or something at 2014. We don’t buyback stocks like 10.5 and 12.5. So right that slide, you could see it, that’s what our stock buyback. Well, that’s not taking – it’s only taking advantage of mitigating items that we knew would actually happen. Betsy Graseck – Morgan Stanley: And then separately, a little bit of a follow-up on the LIBOR question. So one of the concerns that people have had is that clearly with large London presence and with what had happened in the CIO, there’s a question around controls in that region. and so it gets to people thinking about the CIO office didn't have the controls in that part of the world. why should we believe that the rest of your organizations did? and so I think that’s what’s on people mind is there, hearing today the CIO trade, mailbox been wrapped up, but looking forward next six months having our stock in the commons up in some other area?

Well, I can never prove in negative, okay. and so Mike just went through the – our expenses controls and disciplines, which we feel pretty good about, he can’t prove to you that because you’re not going to see it. We think this is isolated. And we think the control is in your – or just as Mike referring to the controls around the country, around the world. We think that it’s pretty good.

Nancy Bush. Nancy A. Bush – NAB Research, LLC: Yes, Nancy Bush, NA Research. Jamie, two questions for you. Your underlying trends were very positive this quarter and there just seems to be a disconnect between what you’re seeing in your underlying trends and what were you hearing about the economy, which seems to be softening, everybody is gloomy, things are terrible, et cetera, et cetera. Could you just flush that out a little bit?

You’re making a good point, because Doug showed the numbers like eight quarters of continuous middle market loan growth, but anecdotally, he was at the other companies too, not all other banks, but a lot of the banks, I hear a lot of the banks small business loan growth, the fact is, we underpin the American economy on their back. Corporate America, middle market companies, small business are okay, there were a lot of equity, it’s not a huge order book, so sales aren’t going to max. We had slow to modest growth. We started to see it in our calculations, some of we’re getting these market share gains. So remember we did middle market, we weren’t doing middle market banking in California, now we do. We weren’t doing small business in California, now we do because of we’re [Wal-Mart] position. So we are gaining severance of our businesses through credit card, middle market, small business, IB’s holding share. Nancy A. Bush – NAB Research, LLC: Second question, there is not a lot of discussion about litigation reserves and your commentary today, could you just comment broadly about with the CIO matter was upcoming whatever may happen with LIBOR, et cetera. What you guys think about your litigation reserves at this point?

So I think, financially, we spoke about mortgage, we think it’s kind of well. We’ve really done a good job there and it could change over time. We put away a lot of way to mortgage over time. This quarter when you see the 10-Q, as you get to see the 10-Q, it will show litigation expenses like $300 million. So we try to keep up with reserving for things we know about. This quarter, of course we had some digging the [nets] isn’t might just one thing that happens.

Richard Ramsden Richard Ramsden – Goldman Sachs: Yeah, Jamie, can you just take us through what the process is for reapplication for the buyback, do you have to resubmit a full CCAR. Are the assumptions going to be the same as what they were for the first one? And what are reasonable timetable for that’s going to be?

Little bit of deviation leading and weaker too.

Yes.

And we’re getting our structures about what that process is going to – might be, what kind of project, but whatever it is, we think we can accommodate it and get it done and resubmit it. And like said I hope that both the board governance, the board estimates review, so I can’t tell you when the board is going to end this review, but I am hopeful that the board review and the capital plan are done in such a way that by the early in the fourth quarter we just buyback stock that we won. Richard Ramsden – Goldman Sachs: Okay. And with the stock trading has this changed your waterfall in terms of buyback versus dividend, dividend increase next year versus buyback?

I wrote letters that – in terms of book value, I think our stock is a great buy. Richard Ramsden – Goldman Sachs: Thanks.

Ed Najarian. Edward R. Najarian – ISI Group Inc.: Richard’s question was my question, so you’ve got it. Thank you.

Andrew Marquardt. Andrew Marquardt – Evercore Partners Inc.: Thanks. Just on the GIPS exposure again, you’ve previously talked about max losses, if all things – of $3 billion after-tax is that still valid, or is there a new number?

The $3 billion was my estimate after-tax, it was $5 billion pre-tax. I did it with my own methodologies, I said it was not, it was a bad outcome, it’s not the worst outcome. As you said that Europe unravels the euro falls apart, I think it could be worse than that. Yeah, I’ve been just recently – I’ve been just constantly looking into this not for company, so TSS does it their number recently is more than $3 billion. We have a Europe command center, we have got a lot of – we know exactly what we are doing there, if some thing goes wrong, we try deal with it. We don’t have the necessary of losses at all. The issue with Europe and the complex is with Europe or what contracts apply, how they apply, who leaves the euro, what currency you paid in, whether that do for losses in the country. So there are all these complex things, but those numbers would still being rough estimates so they are bad outcome, but not the worst outcome. Andrew Marquardt – Evercore Partners Inc.: Thank you. And then separately in terms of that your outlook slide is – something that wasn’t there was the real estate portfolio, still coming down 10% to 15% you’ve said in the past $500 million drag NII on a year-over-year basis, that’s still valid for this year, and maybe somewhere around next year, is that an ongoing issue?

Say, you could assume at this phase same change, same assumptions. Thank you.

Mike Mayo Mike Mayo – Credit Agricole Securities: Mike had a statement saying the level of scrutiny did not evolve commensurate with the increased complexity. He was referring to CIO, but I wonder if that statement could apply to the firm as a whole. I mean February 28, we were all here eight hours of presentation, over 200 slides, no mention of CIO, and then we have the CIO event a risk model that didn’t capture the risk, a new risk model that wasn’t accurately tested before. Checks and balances that might have been passed with the investment bank, it seems to be a little solid. So I’m wondering if the firm as a whole, it’s reaching sort of tipping point when it comes to bigness or complexity that makes it more difficult to manage than in the past?

No Mike Mayo – Credit Agricole Securities: Okay. What can you say to further reassure us, I mean, you’re here in person, have you lost your step, has the focus has gone off…

We have – Mike, this company is the same company that went through ‘06, ‘07, ‘08, ‘09, 2010, 2011 assimilated Bear Stearns brought one of those. And we have record in the last year, we have the record in the year before, it’s likely if you look at your own estimates were record in this year. Okay, and that we have got gained market share, investment banking as a nice management our commercial bank and small business in middle markets, we’re just have great job in marketing the , we’re going to sit back and trying to make this more attractive companies for you all. We’ve made a mistake, we completely disclosed mistake. The newer results are in front of you, we’re in better shape than a year before. Our CIO was not a place, we expect no mistake, we make a mistake. I can't prove it negative. I cannot prove a negative. We believe we’ve had very good controls and very good people in place. Mike Mayo – Credit Agricole Securities: And you’ve gotten the results…

Look at the results by the way. Mike Mayo – Credit Agricole Securities: Yeah. I know the results are, if we didn’t have the details here it would be okay. But we saw how to sausage is made and it just make me more if I might get through poising sometime in the future. What would you say, if you talk to a portfolio manager and you have, 20 seconds to say what weren’t happen again, what would you say to that portfolio manager?

Because we have very granular limits and we’ve got risk committees, credit committees, audit committees, we do terribly a very good job. Now I think it’s certainly for anyone in the business world to think you’re not going to make mistakes. It is not possible in the real world, that’s only possible to fictional world, I just think the mistakes should be small and fewer far between, this has been an exception.

Chris Whalen. Christopher Whalen – Tangent Capital Partners: Chris Whalen from Tangent Capital Partners. First, just quickly on the CIO. Does the nature of these instruments is over-the-counter instruments make you read consider whether or not all of the controls and risk management, everything else you’re putting in place can be effective?

Yeah, it’s not been nation’s instruments. A lot of these things are traded on exchanges, most of the index that you can go and buy from a marketplace easily; most of them are in clearing houses and if you – so want to see you can see them. So I think this portfolio became very big and very complex. Christopher Whalen – Tangent Capital Partners: Right.

I mean that is true, should never, ever, ever going to begin that complex. And meantime the first they’ve said it was too big, it was on embedded, it shouldn’t been done, it was a liquid, it was bad. We should have quoted earlier… Christopher Whalen – Tangent Capital Partners: Right, but that’s kind of my point. When you have an instrument it doesn’t have a clear basis and the basis may ship, the correlations may ship very quickly, can you manage that risk?

I’m sure for all financial instruments. Christopher Whalen – Tangent Capital Partners: Right, now three quick regulatory questions. On Basel, to what extent does the Volcker rule implementation limit your ability to manage the ASF portfolio?

Not at all. Christopher Whalen – Tangent Capital Partners: Okay.

The AFS portfolio is held for sale. Christopher Whalen – Tangent Capital Partners: Right.

So its mark-to-market and the equity count that’s not mark-to-market. And we think you should do you allow the portfolio hedge, we’re not going to do some like this again, but we think (inaudible) and so we’ll talk about Europe one of the quick ways you want to go hedge Europe, right now, you get on the phone, you could buy a $1 billion deduction on European – a 120 European credit names. That is a good thing if you want to protect sales from Europe. It’s not that complex. Christopher Whalen – Tangent Capital Partners: Right.

So it also changes in the future for whole bunch of things, we’ll adopt to that whatever that is. Christopher Whalen – Tangent Capital Partners: On Basel III, how do you expect the Basel III implementation affect your mortgage business?

As a business matter, we’ll explain whatever the Basel III numbers are, it is still a complex. It does create all these things about mezzanine pieces, how securitization is going to work. What’s the FICO score, like FICO to 660 would be very bad under Basel III. So, everyone to modify the business trends of Basel III. It won’t change the mortgage, our ability to be in the mortgage business. Christopher Whalen – Tangent Capital Partners: And last question, how do you feel about the extension of the FDIC Transaction Account Guarantee Program?

I’m not sure whatever you’re talking about.

(Inaudible)

I’m not going to comment on that.

Moshe Orenbuch? Moshe Orenbuch – Credit Suisse: Hey, thanks. Doug had mentioned about the material weakness related to the CIO office. The comments about resubmission of the CCAR and the timeframe into the early fourth quarter, does that contemplate resolving all of kind of the regulatory increase that are on going in addition to the Board, and do you anticipate orders coming out of that? How should we think about the news flow from that standpoint?

And we’re hopeful that when Board finishes review the regulators get to look at everything when Mike is said and done, ask your questions, filed a CCAR. We’re hopeful that by the first quarter we will buyback stock. We think the number is justify. We think the performance of the company justifies it, but we want to go through that process. It’s a prudent thing to do and some stops that were happening and so there. Moshe Orenbuch – Credit Suisse: Thank you very much.

Brennan Hawken? Brennan Hawken – UBS Investment Bank: I’m Brennan Hawken, UBS. So just, and I appreciate that maybe you guys didn’t include some of the synthetic gains in your estimates of earnings power, but you might help if we’re, when we’re looking at these past CIO gains and net income, if we can know how much of that was attributed to the synthetic? So you got 2 billion bucks over ‘07 to ‘11, crucial portion of that’s in 92 from ‘09 to ‘011. Can we have an [idea], was most of that $2 billion there in the ‘09 to ‘11, can you give us an idea there?

I don’t…

So the figure was about $1.4 billion of the $2 billion was in ‘08 to ‘10. Brennan Hawken – UBS Investment Bank: Was that pretax?

Pretax.

It’s pretax. So those numbers are pretax over there. Brennan Hawken – UBS Investment Bank: Okay. So that’s helpful. All right, great. And then, do you know if, with the CCAR resubmission of this, is the scenario going to change? Or is it going to be the same?

They are refreshing and updating their scenarios. We’re going to want new scenario pursuant to their guidelines. Brennan Hawken – UBS Investment Bank: Okay. And in the discussions, I would assume Jamie your confidence that 4Q be get started, that is reflective of what you’ve heard back from the Fed as well?

We’re essentially hopeful and I’ve been wrong before. Brennan Hawken – UBS Investment Bank: Fair enough. And then, my last one. I don’t know if you can comment on this, but it would be helpful to know, do you guys have specific controls that separate communications between derivative traders and the LIBOR rate submission employees?

We are not going to comment anything right there right now. Brennan Hawken – UBS Investment Bank: Okay. Thanks.

Ed Najarian? Edward Najarian – ISI Group: Yeah. I’ve question for Doug. You talked about some of the net interest margin pressure coming from hedging effectiveness. Could you quantify of the 10 basis points, how much you think that is and do you expect that to revert in the third quarter? And then, just generally, given the really impressively low interest rate environment improving right now, maybe some sense of your view on that net interest income trajectory of the company.

So on the first, it was several basis points of the impact. It’s going to vary quarter-on-quarter. It has varied quarter-on-quarter. So part of the difference this quarter is, we had some positive results last quarter and negative results and swing is less important from NIM standpoint. On the NII, in aggregate, we have some portfolio run-offs and we’ve provided you some guidance around that. We continue to build our balances and build our loan portfolio. So the question is going to be which exceeds the other here.

And one disclosure you are going to see, is that this AFS portfolio is yielding 2.6%, but this quarter is going to be…

2.407%.

2.407%. That is hedging effectiveness. It’s really still yielding 2.6%. We did something like that, just a few hedge ineffectiveness when it goes against the asset. Edward Najarian – ISI Group: And then as a quick follow-up, you talked about potentially getting, being close to zero in terms of mortgage repurchase costs through obviously the income statement over the next several quarters. Can you give us maybe a little more commentary around that, are you seeing a significant decline in claims starting to come in? And then secondarily, can you make any comments in terms of your sense of what’s going on in the private label side of mortgage repurchases either on in terms of claims or with respect to litigation?

Yeah. so the real differential there has been a modest decline. The real differential is our secure rates because as these demands go deeper into the securities, they are taking more mortgages that we’ve been paying for longer and the result of that is that we’ve been decreasing the amount of demands we actually have to repurchase. That’s really been driving in part the analysis. On the private label side, you’ll see in our supplement, we had a modest increase in demands, but much of that is going to make its way through litigation. Edward Najarian – ISI Group: So your statement about zero really excludes any thoughts about that litigation?

That’s separate. Separate in the stakes Edward Najarian – ISI Group: Okay, thanks.

Chris Kotowski? Chris Kotowski – Oppenheimer & Co.: Yes, also for Doug. I wonder if you could walk us through a little bit on the changes in the Basel III ratio. At the end of March you reported 8.4% versus 7.9%. Obviously, the NPR must have had an impact there and I was wondering if you could break down what the bigger chunk of that impact are, is it for the treatment of home equity loans or…?

Sure. Actually 20 basis points was refinement of our earnings as a function of the restatements. So there was some move for the restatement, actually about a 10 basis points. The remaining 30 basis points, you can think about that principally as the CRM minimum that was added to the Basel 2.5 rules. That’s the bulk of the RWA. It’s an increase of about $40 billion from our portfolio. We would estimate because that is subject to model approval and you need at least 12 months of operation model approval from the first quarter of 2013. So we are hopeful that $40 billion comes back into when it’s included in some of those projections that Jamie showed you, comes back as a reduction. So we were pretty close on our Basel III estimates. Chris Kotowski – Oppenheimer & Co.: Okay. Now the way I read it though, like, in the home equity loans in particular, it looked like for over 80% loan to values that you’re going to have 1.5 times capital charge?

That’s Basel I. Chris Kotowski – Oppenheimer & Co.: Okay.

That’s Basel I. Basel III rules getting really changed very much for the mortgage portfolio. Chris Kotowski – Oppenheimer & Co.: Okay, great. Thank you.

(Inaudible)

Hi, thank you. I understand from your information that one of the reasons for the losses here was that perhaps the successes even led to some complacency, real governance of the unit. And as I look through some of the discovery information, it seems that the risk management profile here was one that excluded certain basic tenants of risk management, granular levels of asset, concentration risk et cetera. So I guess, I think, as a question was this [year bill] conceives from our risk management perspective, from day one and it took five years to reach the end result or there are perhaps some small successive [look perhaps] the credit management over time that ultimately and perhaps we can look at the new VaR models, and in that being one of those that ultimately led to this result.

So I would say it’s something that the complexity of synthetic credit was there over five years and there were things that obviously we could have cut sooner, but it didn’t took the circumstances in the first quarter get us, but the overall mistake was allowing something that wasn’t like the rest of the ALM type of activities to get housed inside CIO that have one form of risk management structure and then put something new in that required whole different type of risk wrapped around it and do it at the time.

Todd Hagerman? Todd Hagerman – Sterne, Agee & Leach: Yes. Good morning, Mike and Jamie. Mike, you talked a lot about the VaR models, some of the changes. Jamie, you’ve talked in the past about your feelings one way or the other in terms of the usefulness of VaR, if you will, and what I’m curious about is with all the discussion on VaR, if you will, what changes have been made in terms of the dependence on the model themselves and how that relates back to the risk management and the model group and what other controls, tools you may have put in place to again make this a more robust process if you will?

Yeah, first of all, I don’t go in a business on models. And if you do go business on models you will be dead. It doesn’t work. VaR is one model. We use tons of other models and I think Mike pointed about the right way to do is have let other granular limits, notional amount limits, credit spread limits, single name limits, all these things. VaR is just one. VaR does not capture underlying changes and underline. So it captures changes in correlations. It’s only backward looking. So it’s a data point that helps you manage your business. That’s all it is. Now having said that, Mike, we got to do a better job implementing some of these models. Mike?

It is a process of brand models, not the models themselves that’s defining there and the granular risk associate too big takeaways. If you look at the findings there, I’d say, get the right limits around the activity one, and that’s not necessarily a VaR model or any one given type of activity, but if we are going to put things and we got help suspend just to make sure we have proved for the right reasons and as the right operations put around it. Todd Hagerman – Sterne, Agee & Leach: So just as a follow-up, it’s my understanding as an example with the CCAR process and the review of the trading operations, specifically a lot of dependence was placed on the models in terms of their review. What are you sensing now in terms of given the event that’s transpired, how that evaluation is going to change on a go-forward basis, particularly as we think about next year’s CCAR process in light of this event?

I think we certainly put a lot of attention on ourselves. And I think the takeaways that we saw was just bolstering all processes around model of governance, implementation approval, a new team which took 25-year veteran risk manager in charge of a new groups. It’s really going to lead up watching model activities all parts of the process, because really the mistake we made here was roles and responsibilities. So whereas I would say we’re very good, and particularly our Investment Bank, which is the heaviest user of models. We’ve got very robust in-business market risk teams that have the hand off. We’re dealing with parallel testing, back testing, running the operational model themselves. CIO was weaker in that regard. So when you have the interaction between the independent model of review group and the market risk teams in the business, again a particular mistake here. So that's a policy in procedure thing that we’ve even tightened up and John Hogan’s done a lot in the past month.

CCAR is not VaR dependent. It’s stress testing. We do and I would say stress testing is more important, most of the stuff. We do extensive stress testing. And so, to me, you got to get that right. So CCAR has embedded as one test. We do hundreds of stress tests, and obviously we should have done stress testing in this particular portfolio better too.

Paul Miller. Paul Miller – FBR Capital Markets & Co.: Yeah, thanks. Jamie, I think the [10-year] today is right around 15. We keep on hoping as banking analysts that it keeps on going up, but every quarter it goes down. But the 10 year, the flat year curve, which is starting to really weigh on a lot of peoples’ net interest margins, net interest margin was down like 13 basis points, 14 basis points. It really feels like this 10-year is not going to move, and moving a little bit of flat yield curve longer than anybody wish, maybe in the 2014 and 2015. How does you as the bank position yourself for that environment even if it goes down though a lot of people thinking at 1% at this point?

Yeah. So I’m not actually going down to 1%, but getting near the end of the margin compression from the yield curve. So I think if I move across about a year or two ago we might lose another $400 million or $500 million and then it flattens out. And then 10 goes down more, it’s even more. We are short. Most banks have much longer duration than we do. So we could easily, today, put on change what we are doing and put on $50 billion in a mortgage of 3% and earn a lot more. So if you believe in that we could change our structure to earn back some of that income, in fact far more than what you might loose. Paul Miller – FBR Capital Markets & Co.: I guess if we take a bigger step back, as we’re going to be living with this flat yield curve, banks like to live with a steep yield curve. That’s what we’ve all been raised on the last three or four decades. But if we’re going to live in this environment, I mean, how does banks operator? I mean, how are you positioning your institution to go forward with a continued flat yield curve? Yeah, you can adjust the balance sheet. That’s a one-time issue, but going forward how would you run this institution?

I was just telling, I don’t think the effective yield curve has gotten away. If it stays like this forever, we’re still going to earn about what we are earning. So it isn’t like, you have to deal with the negative every year, after the year. And then, obviously how you do your loans and your deposits and get a lot of things in your balance sheet, which earns very little to you, almost doing the service for clients, you might do less of that. So instead of $200 billion of treasury assets we have, we’re earning five basic points on that. So we don’t need to keep those deposits, but we may modify that, but you’ll change your pricing, your products, your services and try to earn a fair return on capital.

Gerard Cassidy. Gerard Cassidy – RBC Capital Markets: Gerard Cassidy, RBC Capital Markets. Doug, you touched on the LCR ratio in the Basel III. Do you guys have an estimate on where that is today, the liquidity ratio?

Yeah. So basically, if you get the number today, it might show a gap, but that gap is easy for us to fix by just changing your asset mix. So we will be LCR compliance by reinvesting the AFS portfolio. We are doing there slight different things. But we want to see the rules before we start swinging the balance sheets all over the place. We will be fine. We are very liquid company. Gerard Cassidy – RBC Capital Markets: And following up on the yield curve commentary that you just made, Jamie, are the returns acceptable, I mean, as you pointed out there is not any incremental negative impact for you guys at the yield curve stays as right. Are the returns on equity acceptable or would you try some on those strategy possibly shrinking the balance sheet and buying back even more stock?

We asked that question all the time, but we’re actually believing making good returns right now. If you look at the returns in our businesses, the 15% return of tangible equity, the record earnings, so could we do more? But we like to tilt the business, bankers, services, clients, execution of services, to grow our business over time and we’ve been doing that such that we focused on, and then we modify pricing products of balance sheet to get a fair return. Gerard Cassidy – RBC Capital Markets: And then finally maybe your comments on what you’re seeing in Europe, how they’re progressing on solving those problems. Do you want to add any color to that?

It’s very hard to answer the way you read about everyday. Now we’re reading about what they kind of need to do and they need to do kind of all of them, one is the bank have the European bank regulator, European bank scheme to stop bank loans have some facility that could finance the time and spend of sovereign debt in the meantime, and then fiscal union, the people believe it. And we think you guys see that kind of in fits and starts over time, and just people compare it to a rollercoaster.

Hang on…

Good morning, Jamie.

(Operator Instructions)

On as assets in 76, as liabilities. Two questions, can you tell us how much of those are netted for the same counterparty? And second, how much of those numbers was the CIO numbers in that at the end of that quarter?

We’ll do the second one first. I think it’s a very small, but CIO is a very small for that number.

Okay. I would agree.

And that’s number one. Number two, they are very complex in any rule, which I don't want to go to here about derivatives, but we did do a presentation. At one point it’s showing exactly how it droves net by counterparty, and we’d be happy to share that with you and take you through it.

Thank you.

Let me make an announcement for the phone, and if you are on the phone please put yourself on the queue at this point, and we’re going to take a few more questions in the room, and then we’re going to move to the phone.

(Operator Instructions).

(Inaudible)

There are no questions here in the phone line.

Okay, so then let’s continue.

All right. Nancy, again. Nancy A. Bush – NAB Research, LLC: Hi, Nancy Bush again. Mike a question for you. Looking at your slide number eight, the events in late April, you say Senior Corporate Risk Management team began onsite bottom-up engagement on April 27, had a senior risk management team done an onsite bottom-up engagement in the CIO before and is that now sort of a established part of risk management.

It’s a good question Nancy. What we refer to there is a – in late April, at this stage, which John Hogan over there and team folks from outside CIO and for cross business, when into – to really sit onsite and take the book apart. Prior to that there was obviously work being done with senior risk folks, but we’re looking through the lens of the CIO risk team. So it took to a different level of intrusion.

And the CIO risk team did an inadequate job. Nancy A. Bush – NAB Research, LLC: Okay.

(Inaudible)

One quick tweak of the and share has always been the incentive structure. I’m just wondering if in the CIO review there was any conclusions based on – if incentives were aligned with long-term shareholder interest.

Sure, we’ve obviously looked at all that. None of the people in CIO are on in any form of formulas to business is not on a formula. We obviously looked at compensation for what we were doing in CIO relative to what you would see – pay related to running $350 billion fixed income portfolio. I can’t obviously get in the minds of the individuals that – in making individual decisions, but we’ve looked for evidence of particular things that were problematic around our compensation schemes and then found no particular issues.

Matt Burnell. Matt H. Burnell – Wells Fargo Securities: Good morning, Matt Burnell from Wells Fargo Securities. A couple of quick questions for you Doug. First of all, you mentioned that the net interest margin effect of the AFS gain or the securities that were sold to generate the gains, this quarter had no effect on this quarter’s NIM. Does that imply any of future quarters NIM as well?

No. Matt H. Burnell – Wells Fargo Securities: Depending on the sales were down.

No, no. Matt H. Burnell – Wells Fargo Securities: Okay.

More a function of reinvestment. Matt H. Burnell – Wells Fargo Securities: Fair enough, okay. And then in terms of the investment banking in sales and trading results those appear to be even if you strip out the DVA reasonably strong. Could you give us a sense as to what your outlook is for those numbers to the extent that you can guess it, and what the drag from Europe is on that, on your outlook there for the next quarter or two?

Yeah, first of all as you know investment banking revenues are unparticular by the nature. And whenever they come in with a low number, I would say we’re pretty much higher. So right now, it looks similar to what it was last quarter. That can change at any one point in time. Obviously, I think you see everywhere, the business in Asia and Europe were down, the America remains to be same. Matt H. Burnell – Wells Fargo Securities: And then one final question. given all the information that Mike provided to us, how much of that information or will there be more information, not only provided to the regulators, but some of your friends on Capital Health?

So we share a lot of information that people ask, the radar is a completely up-to-date on Mike’s information. Mike, get into this...

Yeah, absolutely. More than absolutely.

(Inaudible)

Thank you. I'm (inaudible). Maybe from the perspective of the buy side, a long suffering shareholder and my clients, I’d like to follow-up on Mike Mayo’s question and also reference to KBW report that looked at the potential of splitting off the Chase Consumer Bank with RON credit and having a standalone JPMorgan Commercial bank, investment bank trust and TSS. and the point being much as the tipping point or actual diseconomies of scale, and even if there are economies of scale, the stock market refuses to acknowledge it in terms of the multiple continuum to come down. And I look at the track record over the past year, so and notwithstanding a great performance relative to a pretty low VaR. but it's still a good performance. But we've had the mortgage servicing issues, mortgage foreclosure issues, and military veteran issues, energy, commodities, sales practices, now that’s inexcusable, just unbelievable CIO debacle, and our potential LIBOR. And I think about, what has to happen for either you as a management team or you as a board to finally say, we are a great institution and we own a lot of great businesses, but we have reached that point where we are too big to manage, and in the interest of our shareholders there’s a different corporate structure that would better serve your owners. Thank you.

Yeah, just I like to differ, okay, and there is huge strength in this company that the units get from each other. So, we don't have the strategy, or we’re guessing the things. The investment banks sort of the commercial bank, the TSS gives huge order flows investment bank, we think there is a numerous amount of cross-sell and we do just as much as most, anybody else have there between the consumer banks, small business, private wealth management, credit card mortgage. And our job is to do a great job serving clients grow the business and eventually the stock will reflect it. And so, I think also people, they’re spitting off company. I’ll give my whole life that gives us (inaudible) higher P, lower P that’s like, that’s very short-term stuff. Have a strategy, execute on it, built a business that's where you build value. We don't feel great to be, it haven’t been a great job for sure all this recently, that we completely acknowledge and but we keep on building the company and one day the stock will reflect it. If the Board ever thought of a better strategies, that will be considered at the time.

Right, I would respectively say that, yeah certainly the cross-sell is very obvious, and that's why we’re not look at separating into numerous companies, but I'm just wondering at what point it does become more apparent that there are diseconomies and is it potential that, is it possible to have CIO in part of a smaller institution, it would have gotten the management look that it required.

Hundreds of small banks have gone bankrupt okay (inaudible) went bankrupt?

I'm not telling you those…

You could have argued the other way, there is a huge source of strength that helps growing this company, do all these norms and do best during the involvement, do all these wonderful things, CIO was a mistake, and we’re sorry.

(Inaudible)

Hi, two very quick follow-ups. One I just want to make sure on the LIBOR issue. I understand all the things that you can’t talk about mid investigation, but I’m assuming this has been gone on for a while that you’ve had three, six, maybe more months of internal investigations. Is there anything you can tell us and comment on?

No.

All right, one last try, okay, Doug, on the commentary…

Oh, no.

All right, Mike, on the expense commentary, second half and first half just technical question, does that exclude the $3 billion or so of litigation reserve build in the first half or is it all inclusive?

We talked about the adjusted expenses excludes that.

Okay, thanks.

I think we had a question from John McDonald. John E. McDonald – Sanford C. Bernstein & Co.: I actually had two and Glenn just stolen both. But I guess just one more slide that’s on the LIBOR, do you have any sense of how long the issue will overhang on the industry and whether we’ll get some kind of clarity about the investigations over the summer or is it something that could drag on for long time? Any insight in that and when we’re going to get more information on it?

We had no special insight again. John E. McDonald – Sanford C. Bernstein & Co.: Okay, thanks.

Richard Ramsden? Richard Ramsden – Goldman Sachs: Just a quick follow-up either for Jamie or Mike, was the process of valuing positioned in the CIO book different to the investment bank? Was it just the application of the evaluation technique? I’m referring specifically to the Q1 restatement? Thanks.

This is the application of policies are the same across businesses different applications.

Ed Najarian. Edward R. Najarian – ISI Group Inc.: Hi, Jamie, quick follow-up on sort of your perspective on capital, so since Investor Day in February, it seems like the world has gotten a little bit of – to be a scarier place in terms of – we’re more concerned about Europe, we have the LIBOR thing has cropped up, we're talking more about global economic slowdown. I know you mentioned, you love to buyback the stock at one times tangible book, but is there anything about the last several months of events just from a macro standpoint that make you want to drive to higher capital ratios or get to 9.5% on Basel III Tier 1 common equity faster than you might have thought you wanted to back in February?

Yeah, there – a little bit, and you know those things are as Europe, the fiscal cliff in the United States, it’s all those things will make you to be a little more cautious, but again, I think we’re – next year regardless of all the things and whatever happens.

Gerard Cassidy. Gerard Cassidy – RBC Capital Markets: Mike, you give us a very thorough detailed disclosure how you attack this problem with the CIO, and you are very confident that you have your arms around it. Do the regulators have that same confidence, have they shared that with you that they feel very good that you guys sort of look at this problem?

I can't speak for the regulators, but certainly they have been – we’ve spend a lot of time with them to keep them informed and obviously wanted to guide our work apart from the get going away that was going to satisfy a lot of different opportunities.

They're going to do their own work as they show it, it comes to own conclusions. Remember, the board as an independent group, which is still guiding this taskforce and it will come to its own conclusions too.

Brennan Hawken. Brennan Hawken – UBS Investment Bank: Mike, when you went through your review, do you think that may be the idea that there was no formula for comp in the CIO might have led to some of the trouble and the stretching? And then on a go-forward basis as the follow-up, which is probably more important, how are you guys thinking about structuring comp in the CIO office over the next few years.

No, I mean I don’t think. When we talk about formulas, the individuals getting a cut off revenue, none of that existed, and I don’t think that’s a good thing. I think the kind of practices that are common in CIO was the same as what we do on our Investment Bank. It’s taking the totality of managers, subjective judgment of performance in a multi-year view of how good a person is in his job for multiple years. All that together with the pay practices, how we defer compensation all are our sound policies and it’s the application obviously that you have to get right. Matt, who is now running CIO I’m sure will just bring his own individual management style to doing that, but we didn’t walk away with the feeling that there is anything different about that even with the company or that the company broadly should be doing differently around in administering compensation. Brennan Hawken – UBS Investment Bank: And the idea now that we don’t have a synthetic in CIO, clearly that’s going to mean we should probably just assume more volatile results out of that business and particularly in times when credits getting a little funky.

No, no. Brennan Hawken – UBS Investment Bank: Well, I mean obviously we…

I show you the portfolio. Brennan Hawken – UBS Investment Bank: As an exception.

I showed it was AA+. It’s an AFS portfolio. It’s not mark-to-market and P&L. It’s got a 3.7 year average life, 80% government guaranteed, or government type of entity guaranteed. You’re not going to move all to in it. If we have a small hedge there, if we are sure and you see we hedge more in Europe, that’s what we need when doing a hedge. That really has very good AFS, but the AFS’s subordinates rest of the company. Nothing would please us more than to reduce AFS and make some more great loans. So they can’t say, we pay just from the revenues there, broadly because they’re not there for that, where do they manage this portfolio. We need some very good people. There’s $350 billion, it operates actually how many countries, on multiple currencies. So it is, we need some very good people managing that book just exactly what (inaudible) were BlackRock fixed income portfolio.

(Inaudible)

Yeah. Doug, can you just help us understand, why the default servicing expenses aren’t coming through as fast as you thought and when they might start coming through?

Yeah, so I mentioned three things obviously we operate some of the consent order; second is, this independent foreclosure review, those cost are larger and are going on longer than we expected; and then third is, we just continue to have a lot of defaults properties that we’re processing through.

Those will be coming down.

Those will come down over time but they have – they remained at a level. So our expectation is we’ve thought we’d seen movement in the second, third and fourth quarter. It’s more likely that it’s 2013 event.

Do we have any additional questions on the phone?

We do from the line of Jim Mitchell with Buckingham Research. James F. Mitchell – The Buckingham Research Group Inc.: Hey, good morning. Doug, just a question for you on the margin, just wanted to help, if you can flush out why we saw a decline and it seem like in the trading asset you had securities borrowed turned negative in terms of the yield, other trading assets understood that you have a lower rate environment, but on the flip side, the cost of the trading assets on the liability side seem to go up. So just if you could – is that the hedging impact or can you just kind of explain a little bit more detail on why we’re seeing this dynamic of the negative spread and securities borrowed and other issues?

I’ll get back to you on that. James F. Mitchell – The Buckingham Research Group Inc.: Okay, I’ll follow-up. Thanks.

Thanks.

Any other questions on the phone?

No, ma’am, not at this time.

Any question in the room?

Folks, thank you very much for spending some time with us, revenues next time.

This does conclude today’s conference call. You may now disconnect.