Bloomberg News reports the firm’s operational risk-weighted assets, a measure devised by regulators that determines how much capital the bank needs to hold against potential losses from human error, external threats, fraud and litigation, rose 6.7% in the second quarter to $400 billion, according to an August filing.
Regulators can point to $23 billion of legal settlements last year and a cyber-attack discovered last month as they push JPMorgan to boost its buffer against unforeseen losses.
Wall Street firms including Citigroup Inc. and Bank of America Corp. that together racked up more than $100 billion in post-financial crisis legal costs are facing similar pressures. At JPMorgan, the largest U.S. bank, that means more than $35 billion that can’t be used for dividends or buybacks, prompting Dimon to call it 'stranded capital.'
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