Why Isn’t JPMorgan Adding More Business Abroad?
In an effort to avoid the riskiest sides of the banking business, JPMorgan Chase (NYSE:JPM) is planning to put a hold on new business with foreign financial institutions, according to a Wall Street Journal report. The news outlet reviewed JPMorgan company memos indicating that the shift in the largest U.S. bank has to do with pressure from regulators, though the bank maintains it will continue to operate in the correspondent bank business.
JPMorgan has been plagued by lawsuits and scrutiny from regulators all year. Recently, the bank agreed to settle claims it was manipulating U.S. energy markets, paying $410 million to the Federal Energy Regulatory Commission. Last week, JPMorgan also agreed to pay $23 million in order to end a lawsuit that claimed the company had acted improperly when handling investors’ money.
The company’s problems do not end there. Headaches surrounding the London Whale debacle continue to plague the banking giant. The move to hold off on new business with foreign banks seems to be a response to an order by the Federal Reserve to become more responsible in its efforts to curtail money laundering. According to the Wall Street Journal report, the Fed also turned up the heat on rival Citigroup (NYSE:C) over this issue.