JPMorgan CEO and Chairman Jamie Dimon gestures while speaking during the U.S. Senate Committee on Banking, Housing and Urban Affairs’ oversight hearing on Wall Street firms on Capitol Hill in Washington, D.C.
Evelyn Hochstein | Reuters
JPMorgan Chase said late Wednesday, United States Federal Reserve A key revenue measure was overestimated in the giant bank’s recent stress tests, and its losses in the tests should actually have been higher than regulators found.
The bank took the unusual step of issuing a press release release Minutes before midnight ET, it released its response to the Fed’s findings.
JPMorgan said the Fed’s forecast for a measure called “other comprehensive income,” which represents revenue, expenses and losses not included in net income, “appears to be too large.”
under Fed table JPMorgan received $13 billion in OCI, based on projected revenue, income and losses through 2026, more than any of the 31 lenders tested this year. It also estimated that the bank would face about $107 billion in loan, investment and trading losses in this scenario.
“If the company’s analysis is correct, the resulting stress losses will be slightly higher than the levels disclosed by the Fed,” the bank said.
The mistake means JPMorgan may need more time to finalize its share buyback plan, people familiar with the matter said. Banks are expected to begin disclosing the plans after markets close on Friday.
The news comes in response to the Federal Reserve’s announcement yesterday that all 31 banks cleared the hurdle in annual exercises of being able to withstand a hypothetical severe recession while maintaining adequate capital levels and the ability to lend to consumers and businesses. of a wrinkle.
last year, Bank of America and Citigroup made similar disclosures, explain Their estimates of their future income differed from the Fed’s results.
Banks complained that some aspects of the annual review were opaque and that it was difficult to understand how the Fed arrived at some of its results.
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