JPMorgan Chase provided evidence of more turbulence in financial markets, warning yesterday that stormy credit conditions had forced it to take a $1.5bn (£785m) writedown on mortgage-backed assets in July.

The warning by JPMorgan will reinforce investors’ worries over the length and breadth of the financial crisis.

In a regulatory filing, JPMorgan said since the beginning of July, trading conditions in the mortgage market 'had substantially deteriorated... causing the company to incur losses' of $1.5bn, excluding hedges.

Bankers said July was the worst month for mortgage-backed bonds since the beginning of the crisis, as a combination of cut-price sales and waning demand from large investors helped to depress prices.

Financial Times