JP Morgan Chase is not in the commodities speculation business, Blythe Masters, head of global commodities for the bank, told CNBC Thursday.
"It's not part of our business model. It would be wrong and we don’t do it," she said.
The misperception, rampant in the blogosphere, comes from what JPMorgan does for clients, Masters said.
"We store significant amounts of commodities, for instance silver, on behalf of customers. We operate vaults in New York City, in Singapore and in London. Often when customers have that metal stored in our facilities they hedge it on a forward basis through JPMorgan, which in turn hedges in the commodities market," she said.
"If you see only the hedges and our activity in the futures market but you aren't aware of the underlying client position that we're hedging, then it would suggest inaccurately that we're running a large directional position," she added. "In fact that's not the case at all. We have offsetting positions. We have no stake in whether prices rise or decline."
To JP Morgan, which earned $2.8 billion in revenue last year from its commodities business, it's "not about betting on commodities prices but assisting clients in executing, managing their risks and ensuring them access to capital so they can make the kind of large, long-term investments that are needed in the long run to expand the supply of commodities," she said.