Connect with us

Hi, what are you looking for?

Jewish Business News


Fed Wants JPMorgan to Go to Pieces

JP Morgan Chase & Co sign outside headquarters in New York- JPMORGAN

In the depth of the financial crisis, the Federal Reserve encouraged JPMorgan to adopt failed banks, but now the Fed may try to split them up again, according to CNBC. The whole debate of whether JPMorgan is too big and needs to be shrunk has been revived as the Fed said JPMorgan had to hold 12% of capital as a buffer against the breakdown that caused the financial crisis. This capital requirement is bigger than that for other banks, and those critical of JPMorgan’s size may call for the bank to be split into two to four pieces. Others say a move will be good for the bank because it will unlock shareholder value.

Goldman Sachs analyst Richard Ramsden said “Size is now a regulator negative, ” and thinks JPMorgan might be a “victim of its own success.” The irony is JPMorgan is so large because it took over Chase in 2001, but was also required to pick up banks felled in the crisis, such as Bear Stearns and Washington Mutual, a move encouraged by the Fed. The bank showed strong revenues last year, but it was up just 7% compared to a 11.4% for the S&P 500, and well behind many of its peers, which returned double digits.

Please help us out :
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at
Thank you.

Ramsden thinks that breaking up JPMorgan may be painful because of the “execution risk, ” and the move may be  labor intensive, given the size of each segment. Analyst Christopher Whalen sees a 1 in 3 chance of JP Morgan breaking up and thinks it will be done through a more gentle manner, like selling off assets.



You May Also Like

World News

In the 15th Nov 2015 edition of Israel’s good news, the highlights include:   ·         A new Israeli treatment brings hope to relapsed leukemia...


The Movie The Professional is what made Natalie Portman a Lolita.


After two decades without a rating system in Israel, at the end of 2012 an international tender for hotel rating was published.  Invited to place bids...

VC, Investments

You may not become a millionaire, but there is a lot to learn from George Soros.

Copyright © 2021 Jewish Business News