JPMorgan, the biggest U.S. bank, has lost at least $5.8 billion in failed derivative trades. It may cut 2012 bonuses but is also grappling with how to do that without drastically reducing executives' take-home pay, the Journal reported, citing people close to the institution.

It also said Citigroup's board is set to decide how to revise next-year's compensation plan to elicit support among investors. In April, shareholders rejected the management's pay structure in a non-binding vote.

A number of U.S. banks are wrestling with executive pay amid a soft financial-industry performance, weak economic growth and widespread cost-cutting.

Neither JPMorgan or Citigroup could immediately be reached by Reuters outside of U.S. business hours.

(Reporting by Sunayan Bhattacharjee in Bangalore; Editing by Edwina Gibbs)

• A Permanent Economic Emergency