JPMorgan Chase says its stress test losses should be higher than what the Fed disclosed

JPMorgan Chase said precocious Wednesday that the Federal Reserve overestimated a cardinal measurement of income successful the elephantine bank's caller stress test, and that its losses nether the exam should really beryllium higher than what the regulator found.

The slope took the antithetic measurement of issuing a property release minutes earlier midnight ET to disclose its effect to the Fed's findings.

JPMorgan said that the Fed's projections for a measurement called "other broad income" — which represents revenues, expenses and losses that are excluded from nett income — "appears to beryllium excessively large."

Under the Fed's table of projected revenue, income and losses though 2026, JPMorgan was assigned $13 cardinal successful OCI, much than immoderate of the 31 lenders successful this year's test. It besides estimated that the slope would look astir $107 cardinal successful loan, concern and trading losses successful that scenario.

"Should the Firm's investigation beryllium correct, the resulting accent losses would beryllium modestly higher than those disclosed by the Federal Reserve," the slope said.

The mistake means that JPMorgan mightiness necessitate much clip to finalize its stock repurchase plan, according to a idiosyncratic with cognition of the concern who declined to beryllium identified speaking astir the regulatory process. Banks were expected to statesman disclosing those plans connected Friday aft the marketplace closes.

The quality is simply a wrinkle to the Federal Reserve's announcement Wednesday that all 31 of the banks successful the yearly workout cleared the hurdle of being capable to withstand a terrible hypothetical recession, portion maintaining capable superior levels and the quality to lend to consumers and corporations.

Last year, Bank of America and Citigroup made akin disclosures, saying that estimates of their ain aboriginal income differed from the Fed's results.

Banks person complained that aspects of the yearly exam are opaque and that it's hard to recognize however the Fed produces immoderate of its results.