Bank of Montreal takes hit on gas

Bank of Montreal (BoM) has revealed energy commodity trading loses of between C$350m to C$450m incurred through gas movements on both New York Mercantile Exchange (Nymex) and via OTC trades. The bank described the loss as "a result of decisions that did not adequately recognise the vulnerability of portfolio to changes in market volatility". However the bank refuted claims that the BoM risk management models were not adequate.

Bill Downie, BoM chief executive, said that gas trading has been particularly successful following Hurricane Katrina, providing strong results for the bank in the first half of...