JPMorgan No Longer Stands Alone as Most Important Bank
(Bloomberg) — Global financial regulators said JPMorgan Chase & Co. was no longer the world’s most systemically-important bank, recommending a lower capital burden for the firm and several of its rivals.
JPMorgan, which has been alone at the top of the Financial Stability Board’s annual rankings since 2017, was reduced one rung on Wednesday to sit alongside Citigroup Inc. and HSBC Holdings Plc in the same risk category. JPMorgan declined to comment on the change, which was based on data from the end of 2019.
Wednesday’s list uses banks’ size and complexity before the Covid-19 pandemic, which forced lenders to set aside tens of billions of dollars to cover potential credit losses, while authorities eased or delayed rules to help the industry respond.
JPMorgan, the biggest U.S. bank, has benefited from a surge in revenue from stock and bond trading desks in the midst of the pandemic, which contributed to a surprise increase in third-quarter earnings. Its shares, which plunged with other bank stocks in March, recently rebounded but have still fallen 16% so far this year.
Banks included in the Basel-based FSB’s list face more stringent capital demands and closer scrutiny of their risk management. The FSB panel, which recommends changes that national supervisors may implement, said shifts in the rankings reflect underlying changes in banks’ activity.
The FSB includes representatives from authorities including the European Central Bank and Bank of England and is chaired by Randal Quarles, a vice chairman of the U.S. Federal Reserve.
|FSB Additional Buffer||Banks moved into category||Banks unchanged in category|
|2.0%||Moved down: JPMorgan Chase||Citigroup, HSBC|
|1.5%||Moved up: China Construction Bank||Bank of America, Bank of China, Barclays, BNP Paribas, Deutsche Bank, Industrial and Commercial Bank of China, Mitsubishi UFJ FG|
|1.0%||Moved down: Goldman Sachs, Wells Fargo||Agricultural Bank of China, Bank of New York Mellon, Credit Suisse, Groupe BPCE, Groupe Credit Agricole, ING Bank, Mizuho FG, Morgan Stanley, Royal Bank of Canada, Santander, Societe Generale, Standard Chartered, State Street, Sumitomo Mitsui FG, Toronto Dominion, UBS, UniCredit|