Jp Morgan
JPMorgan Chase & Co.
Table of Contents
Executive Summary 2
Introduction 3 PEST Analysis 3
Industry Analysis 4 Risk Business line risks 6 Enterprise wide risks Credit risk 7 Liquidity risk 8 Operational risk 8
Reputational risk 9 Prioritizing JPMorgan’s risks 10
Recommendation
Culture 11 Governance 11 Operation 11
Reputational risk 11 A Holistic approach 12
References 13
Appendix 15
Executive Summary JPMorgan Chase & Co. (NYSE: JPM) is one of the world’s largest financial institutions with over $2 trillion in assets. JPM is headquartered in New York and has grown substantially in the past ten years as a result of multiple significant acquisitions and mergers. Most recently, JPM purchased the assets of troubled investment broker Bear Stearns and retail banking institution Washington Mutual, both in 2008. Most financial institutions lost substantial share value throughout 2007 and 2008 due to the struggling residential housing market and overall economic conditions. JPMorgan Chase preserved through the worst of the financial crisis in remarkably good shape. Much of JPMorgan Chase 's outperformance was due to common sense risk management. For example, the bank carried far more tangible capital than Citigroup in early 2008, providing a much larger buffer against subsequent losses. Such conservatism is still paying off, as JPMorgan Chase 's capital base and earnings power ensure that the firm 's recent surprise trading loss will not permanently damage the firm. That being said, the recent missteps is a reminder that even the best managers can mitigate, but not eliminate, risk at financial firms.
Recommendation: Strengthen Risk
Table of Contents
Executive Summary 2
Introduction 3 PEST Analysis 3
Industry Analysis 4 Risk Business line risks 6 Enterprise wide risks Credit risk 7 Liquidity risk 8 Operational risk 8
Reputational risk 9 Prioritizing JPMorgan’s risks 10
Recommendation
Culture 11 Governance 11 Operation 11
Reputational risk 11 A Holistic approach 12
References 13
Appendix 15
Executive Summary JPMorgan Chase & Co. (NYSE: JPM) is one of the world’s largest financial institutions with over $2 trillion in assets. JPM is headquartered in New York and has grown substantially in the past ten years as a result of multiple significant acquisitions and mergers. Most recently, JPM purchased the assets of troubled investment broker Bear Stearns and retail banking institution Washington Mutual, both in 2008. Most financial institutions lost substantial share value throughout 2007 and 2008 due to the struggling residential housing market and overall economic conditions. JPMorgan Chase preserved through the worst of the financial crisis in remarkably good shape. Much of JPMorgan Chase 's outperformance was due to common sense risk management. For example, the bank carried far more tangible capital than Citigroup in early 2008, providing a much larger buffer against subsequent losses. Such conservatism is still paying off, as JPMorgan Chase 's capital base and earnings power ensure that the firm 's recent surprise trading loss will not permanently damage the firm. That being said, the recent missteps is a reminder that even the best managers can mitigate, but not eliminate, risk at financial firms.
Recommendation: Strengthen Risk
References: