JPMorgan Chase says its stress test losses should be higher than what the Fed disclosed
What key measure of income did the Federal Reserve overestimate?
The Federal Reserve overestimated a key measure of income called "other comprehensive income" (OCI) in JPMorgan Chase's recent stress test. OCI represents revenues, expenses, and losses that are excluded from net income. JPMorgan claimed that the Fed's projections for OCI appeared to be too large, which could lead to higher losses for the bank under the stress test scenario.
What might JPMorgan require more time to finalize?
JPMorgan might require more time to finalize its share repurchase plan due to the Federal Reserve overestimating a key measure of income in the bank's recent stress test1. The error in the Fed's projections for "other comprehensive income" has led to JPMorgan needing additional time to finalize the plan, as the bank's losses under the exam should actually be higher than what the regulator found1.
How did JPMorgan Chase respond to the Fed's findings?
JPMorgan Chase responded to the Fed's findings by issuing a press release, stating that the Federal Reserve overestimated a key measure of income in the bank's recent stress test2. The bank claimed that its losses under the exam should actually be higher than the regulator's findings. This error may cause a delay in finalizing JPMorgan's share repurchase plan.