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As $150 billion General Electric Co. grew its business and expanded its book of derivatives used for hedging foreign currency and interest-rate exposures, the number of highly rated counterparties with which it could do business remained static. That meant that GE, by 2004, was approaching credit thresholds, and expected future growth could pose problems. If GE reached the limit on the credit exposure it could have with a given derivatives dealer, it might have to cut back on trading with that counterparty to stay within its exposure cap. If the bank with which it was trading derivatives contracts reached its limit on credit exposure to GE, the bank would have to allocate more capital to back up additonal exposure–a cost it would pass on to GE. “Our existing structure could have limited GE treasury’s ability to hedge efficiently,” notes Dennis Sweeney, deputy treasurer.
The average annual healthcare spending for individuals with employer-sponsored plans reached an all-time high of $5,641 in 2017.
The bank believes JPM Coin “can yield significant benefits by reducing clients’ counterparty and settlement risk, decreasing capital requirements, and enabling instant value transfer.”
Designed to support cross-border payments, JPM Coin will be a direct competitor to Ripple's XRP, but with a stable value pegged to the U.S. dollar.
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