United States banking and financial services giant JPMorgan Chase & Co. is the biggest risk to the financial system, Reuters reported Wednesday, citing a US government study.
The bank had a systemic risk score of 5.05 percent for 2013, the highest among 33 large US banks, the Treasury Department’s Office of Financial Research (OFR) said in the study.
It is the first research ranking US banks with a numerical risk score.
The score is based on size, interconnectedness, complexity and cross-border activities and reflects the views of the authors, not of the office or the Treasury Department.
The number is a measure of a bank’s risk as a ratio of the 100 percent total in a worldwide group of banks. The method is designed by the Basel Committee of global bank regulators.
Citigroup Inc. was the second most risky, with a score of 4.27 percent. Bank of America Corp. was third at 3.06 percent, followed by Morgan Stanley and Goldman Sachs Group Inc., the report said.
Goldman Sachs, Morgan Stanley and Bank of America declined to comment on the study.
The other banks did not immediately react to requests for comment.
The OFR was set up after the 2007-2009 credit meltdown to help regulators map financial markets.
The latest study looked at 33 US banks with assets abover US$50 billion. At that size, such banks are deemed “systemically important” and are subject to tighter rules.
The eight largest banks in the group need to meet even tougher standards.
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