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<\/p>\nThe European Central Bank (ECB) announced on Thursday it had fined JPMorgan a total of 12.2 million euros ($14.4 million) for misreporting risk, the largest fine so far levied by the Frankfurt institution.<\/p>\n
The U.S. investment bank has been found that it had misclassified some transactions and excluded others from its calculations between 2019 and 2024, the ECB said.<\/p>\n
“This occurred because, for 15 consecutive quarters, the bank misclassified corporate exposures and applied a lower risk-weight for credit risk to them than what banking rules prescribe,” it said in a statement.<\/p>\n
It said JPMorgan had reported that its capital buffers were bigger than they actually were.<\/p>\n
“The bank committed both breaches with serious negligence, driven by evident deficiencies in its internal processes,” the ECB said.<\/p>\n
“The bank’s internal controls did not detect the breaches in a timely manner,” it added.<\/p>\n
Banks are required to keep a certain amount of cash or highly liquid assets on their books in proportion to the amount of risky holdings they have.<\/p>\n
Artificially lowering the proportion of risky assets on its books would have freed up cash for JPMorgan to invest in other areas.<\/p>\n
The ECB last week fined French bank Credit Agricole 7.55 million euros for being too slow to evaluate its climate change-related risk in response to a request from the central bank.<\/p>\n
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