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Who Is the Most Systemic of Them All? JP Morgan

Joe Mont | February 18, 2015

The financial crisis catch phrase “too big to fail,” is as much about interconnectivity as asset size. New research by the Treasury Department's Office of Financial Research answers the question of what bank would cause the most damage, and knock over the most financial dominoes, if it was to fail? The answer: JPMorgan Chase.

The OFR study, for the first time, ranks 33 U.S. banks by their level of systemic risk. JPMorgan netted the highest "systemic risk score," a calculation that measure of a bank's risk as a ratio of the total risk contained by a worldwide group of banks. Scores were based on size, assets under custody, interconnectedness, complexity, underwriting activity, OTC derivatives holdings, outstanding securities, and cross-border activities and liabilities. “Several of the largest banks scored high in systemic importance because they...

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