JPMorgan Chase has said that internal stress tests show the company would come through an economic crisis with more than enough capital to stay in business.
Bloomberg News reports that JPMorgan’s Tier 1 common ratio would be at least 8.5% in a scenario designed to measure how the firm would perform during a severe crunch, the New York-based bank said Monday in a presentation on its website.
The bank would show a net loss before taxes of $0.3bn from the second quarter of 2013 through the middle of 2015, with $32.1bn in loan losses and $17.5bn in trading and counterparty losses.
The biggest U.S. banks must run their own tests on how they would fare during a crisis to supplement those conducted by the Federal Reserve six months earlier. The central bank reports results each March based on different economic assumptions. The most recent round showed 17 of the 18 largest firms surviving a deep recession.
Goldman Sachs said it could handle a crisis that sends stocks down 40% and produces $20bn in trading losses for the firm.
Bank of America, ranked second by assets among U.S. lenders, foresaw a $26.1bn cumulative deficit. Citigroup, ranked third by assets, found it would exceed capital minimums even after sustaining about $43bn in loan losses and $10bn in trading and counterparty losses.
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