Research Report (990 words)
“Explain the role of J.P. Morgan Chase & Co in the financial system. Assess its exposure and performance during the financial crisis of 2007-2010. Did it do well or badly?”
The bank
J.P. Morgan Chase & Co. (JPMorgan) is the biggest bank by assets and the most profitable bank in the United States. It can be recognized as the most robust bank. JPMorgan, as a global financial services leader with a long history, was formed in 2000 after merging with The Chase Manhattan Corporation. JPMorgan is a financial services holding company and an American multinational banking organization. According to Forbes magazine, it is the world 's third largest public company and a major provider of financial services based on a composite …show more content…
Its net income was $5605mil at end-2008, decreasing by 63.5% from $15365milin the year before.. There were two reasons for the unsatisfied earnings in 2008. First, for consumer and mortgage loans, JPMorgan decided to increase credit costs. Second, most because of leveraged lending and mortgage exposures, its investment bank had a write-down of more than $10 billion. These two issues led to the decreasing of net income and the second issue even led to a loss of $1.2 billion which was reported by the investment bank. Besides, all the other business among JPMorgan’s line of business reported a net income (2008 annual …show more content…
The most important one was purchasing Bear Stearns and Washington Mutual when these two companies met bankrupt because of financial crisis. Those two companies both had significant impacts on the whole financial environment. So if they went bankrupt, the financial market would be badly shocked and lots of employees would lose their jobs. This behavior also contributed to the increase of JPMorgan’s own total asset, rising from $1562147mil at end-2007 to $2175052mil at end-2008 and helped itself to extend its business. For example, purchasing Bear Steams does benefit on its service of hedge fund and purchasing Washington Mutual contributes to complete most of the layout of retail banking in the United States (2008 annual
“Explain the role of J.P. Morgan Chase & Co in the financial system. Assess its exposure and performance during the financial crisis of 2007-2010. Did it do well or badly?”
The bank
J.P. Morgan Chase & Co. (JPMorgan) is the biggest bank by assets and the most profitable bank in the United States. It can be recognized as the most robust bank. JPMorgan, as a global financial services leader with a long history, was formed in 2000 after merging with The Chase Manhattan Corporation. JPMorgan is a financial services holding company and an American multinational banking organization. According to Forbes magazine, it is the world 's third largest public company and a major provider of financial services based on a composite …show more content…
Its net income was $5605mil at end-2008, decreasing by 63.5% from $15365milin the year before.. There were two reasons for the unsatisfied earnings in 2008. First, for consumer and mortgage loans, JPMorgan decided to increase credit costs. Second, most because of leveraged lending and mortgage exposures, its investment bank had a write-down of more than $10 billion. These two issues led to the decreasing of net income and the second issue even led to a loss of $1.2 billion which was reported by the investment bank. Besides, all the other business among JPMorgan’s line of business reported a net income (2008 annual …show more content…
The most important one was purchasing Bear Stearns and Washington Mutual when these two companies met bankrupt because of financial crisis. Those two companies both had significant impacts on the whole financial environment. So if they went bankrupt, the financial market would be badly shocked and lots of employees would lose their jobs. This behavior also contributed to the increase of JPMorgan’s own total asset, rising from $1562147mil at end-2007 to $2175052mil at end-2008 and helped itself to extend its business. For example, purchasing Bear Steams does benefit on its service of hedge fund and purchasing Washington Mutual contributes to complete most of the layout of retail banking in the United States (2008 annual