ECB Fines J.P. Morgan SE €12.18M For Capital Reporting Failures / Fresh Today / CUToday.info

FRANKFURT, Germany — The European Central Bank has imposed €12.18 million in administrative penalties on J.P. Morgan SE after finding the bank wrongly calculated and reported its risk-weighted assets over multiple years.

According to the ECB, between 2019 and 2024 the bank reported lower risk-weighted assets than required under banking rules. For 15 consecutive quarters, J.P. Morgan SE misclassified certain corporate exposures and applied lower credit-risk weights than prescribed. For 21 consecutive quarters, it also excluded certain transactions when calculating credit valuation adjustment risk tied to derivatives counterparties.

The ECB said the breaches were committed with “serious negligence,” citing deficiencies in the bank’s internal processes and controls that failed to detect the errors in a timely manner.

By understating its risk-weighted assets, the bank reported higher capital ratios than it should have, the ECB said, limiting supervisors’ ability to fully assess its risk profile. Risk-weighted assets form the basis for determining regulatory capital requirements and are central to measuring a bank’s ability to absorb losses, ECB added.