Regulators name JPMorgan as the most important bank for the global financial system

JPMorgan It was once again named the world’s leading bank for the health of the financial system, based on the latest annual ranking of top lenders issued by international regulators.

The Financial Stability Board (FSB), made up of regulators from the countries of the group of economies of the G20, published on Tuesday its latest table of the 30 banks with the greatest systemic relevance in the world.

The 30 lenders are divided into four “groups” in order of how systemic, international, interconnected, and complex they are, and JPMorgan Chase and Co. it was located in a higher section with respect to its closest peers.

Last year, the US bank, which was also the world’s most systemically important lender in 2019, shared the highest segment with HSBC and Citigroup, but now you are alone in the next segment, which had been empty.

BNP Paribas and Goldman Sachs they also rose in the ranking on systemic relevance, both with increases of one tranche.

Being included in the implies means having to hold additional capital and undergo more intense supervision to avoid a repeat of the taxpayer bailouts that happened during the global banking crisis more than a decade ago.

In practice, lenders often have capital reserves that already exceed the FSB requirements.

JPMorgan had a core capital ratio of 12.9% capital to risk-weighted assets at the end of September, well above the 11.3% low set by the Federal Reserve American, according to a bank document.

The FSB capital surcharge for JPMorgan it is now 2.5%, up from 2% last year.

US banks have fought aggressively, albeit unsuccessfully, against the FSB capital surcharges, but they are unlikely to make much progress under the Democratic president’s administration. Joe Biden.

However, the FSB raised the prospect of easing for euro zone banks on how their exposures to other nations in the bloc are calculated.

Eurozone lenders argue that they are regulated by the European Central Bank under the EU Banking Union and therefore its exposures to other Eurozone countries should not be considered “cross-border”, resulting in stricter treatment.

The FSB said Tuesday that the Basel Committee, which writes the global bank capital rules, will conduct a short-term review of cross-border exposures within the banking union against its list of most systemic lenders.