JPMorgan Chase Bank Safety Fact Sheet

1. Bailout Amounts and Placement on the FSB List of Too-Big-To-Fail Banks

JPMorgan Chase (JPM) received $25 billion in bailout funds1 in the 2008-09 financial crisis.

JPM is listed by the Financial Stability Board (FSB) as a global systemically important bank.2 TThe FSB is an international body that monitors3 the global financial system and is made up of members from the G20 nations.4

  • In November 2012, the Financial Stability Board listed JPM as one of 28 banks whose failure could cause serious systemic financial/economic problems.5

  • JPM's placement on the list is at the highest rung used for 2012, which indicates that it is among the four most critical financial institutions in the global economy. Banks in this category are required by the FSB to have the highest level of capitalization, which is actually quite low, at 2.5%.

  • FDIC Vice Chairman Thomas Hoenig, testifying before the House Financial Services Committee on June 26, 2013, said the biggest Wall Street banks are “woefully undercapitalized,” while calling the industry underpinnings a “very vulnerable financial system.”

 

2. Derivatives Holdings

  • JPM holds a breath-taking $70.288 trillion (notional value) exposure to derivative holdings, the most of any bank in the world, and an amount equal to the entire annual global GDP. During Chapter 11 bankruptcy in the U.S., derivatives counterparties receive "super-priority" status above all other creditors, including depositors. This means that derivatives counterparties will get all of the bank's assets before any other creditors, including depositors, are paid.6

  • Due to the contagion effect7 of the fractional reserve banking system and JPM's significant investments in derivatives, deposits held with JPM may be vulnerable. JPM's failure could have a significant impact on our economy in Washington, DC. As noted below JPM holds a significant share of deposits for the government of DC.

6 Princeton Law Review, Prof. Mark J. Roe, The Derivatives Market's Payment Priorities as Financial Crisis Accelerator: http://www.naic.org/documents/committees_e_receivership_110819_comments_mo_doi.pdf


3. DC Market Share

(follow link for current DC market share for JPMorgan Chase)

 

4. DC Government Deposits/Investments

(follow link for current DC government deposits with JPMorgan Chase)

 

5. Criminal Activity List

Listed below are some of the recent criminal cases against JPMorgan Chase:

  • On November 16, 2012, JPMorgan Chase was fined $296.9 million for misleading investors in offerings of residential mortgage-backed securities 1 2

  • As of 11 July 2012, JPMorgan Chase is one of sixteen banks being investigated for rate rigging in the LIBOR scandal 3

  • On April 4, 2012, JPMorgan Chase was fined $20 millionfor mishandling customer funds from Lehman Brothers, the bank whose collapse heralded the start of the financial crisis that began in 2008 4 5

  • On July 7, 2011, JPMorgan Chase was charged $228 million for charges the bank's securities division rigged the market for municipal bond derivatives. 6 7

  • On April 21 2011, JPMorgan Chase agreed to pay a total of $27 million in compensation to military families for wrongly overcharging their mortgages including active duty personnel in Afghanistan. The bank also admitted it improperly foreclosed on more than a dozen military families 8 9

  • In June 2010, JPMorgan Chase was fined £33.32 million ($49.12 million) by the UK Financial Services Authorityfor failing to properly segregate client funds from corporate funds 10 11

2 Financial Fraud Enforcement Task Force, http://www.stopfraud.gov/iso/opa/stopfraud/DC-121116.html

5 Commodities Futures Trading Commission, http://www.cftc.gov/PressRoom/PressReleases/pr6225-12

 

 

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