JPMorgan Chase & Co. plans to charge institutional clientssuch as hedge funds for certain deposits as tougher regulationsrequire banks to hold more capital against some funds, according toa memo.
|The world's largest investment bank plans to reduce itsnon-operating deposits, or extra cash held in client accounts,which have become a “costly and inefficient use of our balancesheet,” JPMorgan said in a memo seen by Bloomberg News andconfirmed by a spokesman in London. The bank will encourage otherproducts, while likely charging for some deposits and asking someclients to hold their money at a different firm.
|“Several new rules and measurements require higher capitalpositions for the largest, most systemically important U.S. bankholding companies, including JPMorgan,” the bank said.“Institutional deposits in excess of the amount needed foroperating purposes are viewed as temporary funding, and as a resultcannot be fully deployed for traditional lending.”
|Stiffer capital requirements and increased operating expenseshave prompted banks around the world to look for ways to shore upearnings. In a push to make the financial system safer, the FederalReserve has proposed a plan that may require JPMorgan to add morethan $20 billion in capital by 2019.
|The Wall Street Journal reported the memo earlier.
|Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.
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