JPM Overview

The Firm’s website is www.jpmorganchase.com. JPMorgan Chase makes available on its website, free of charge, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files or furnishes such material to the U.S. Securities and Exchange Commission (the “SEC”) at www.sec.gov. JPMorgan Chase makes new and important information about the Firm available on its website at https://www.jpmorganchase.com, including on the Investor Relations section of its website at https://www.jpmorganchase.com/ir. Information on the Firm's website, including documents on the website that are referenced in this Form 10-K, is not incorporated by reference into this Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K” or “Form 10-K”) or the Firm’s other filings with the SEC. The Firm has adopted, and posted on its website, a Code of Conduct for all employees of the Firm and a Code of Ethics for its Chairman and Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and all other professionals of the Firm worldwide serving in a finance, accounting, treasury, tax or investor relations role. The Code of Ethics is also available in print upon request to the Firm’s Investor Relations team. Within the time period required by the SEC, JPMorgan Chase will post on its website any amendment to the Code of Ethics and any waiver applicable to a director or executive officer.


JPM Business segments

For management reporting purposes, JPMorgan Chase’s activities are organized into four major reportable business segments, as well as a Corporate segment. The Firm’s consumer business is the Consumer & Community Banking (“CCB”) segment. The Firm’s wholesale businesses are the Corporate & Investment Bank (“CIB”), Commercial Banking (“CB”), and Asset & Wealth Management (“AWM”) segments.


JPM Business segments

A description of the Firm’s business segments and the products and services they provide to their respective client bases is provided in the “Business segment results” section of Management’s discussion and analysis of financial condition and results of operations (“Management’s discussion and analysis” or “MD&A”), beginning on page 48 and in Note 32. On May 1, 2023, JPMorgan Chase acquired certain assets and assumed certain liabilities of First Republic Bank (the “First Republic acquisition”) from the Federal Deposit Insurance Corporation (“FDIC”). Refer to Note 34 for additional information.


JPM Competition

JPMorgan Chase and its subsidiaries and affiliates operate in highly competitive environments. Competitors include other banks, brokerage firms, investment banking companies, merchant banks, hedge funds, commodity trading companies, private equity firms, insurance companies, mutual fund companies, investment managers, credit card companies, mortgage banking companies, trust companies, securities processing companies, automobile financing companies, leasing companies, e-commerce and other internet-based companies, financial technology companies, and other companies engaged in providing similar as well as new products and services. The Firm’s businesses generally compete on the basis of the quality and variety of the Firm’s products and services, transaction execution, innovation, reputation and price. Competition also varies based on the types of clients, customers, industries and geographies served. With respect to some of its geographies and products, JPMorgan Chase competes globally; with respect to others, the Firm competes on a national or regional basis. New competitors in the financial services industry continue to emerge, including firms that offer products and services solely through the internet and non-financial companies that offer products and services that disintermediate traditional banking products and services offered by financial services firms such as JPMorgan Chase.


JPM Human capital

JPMorgan Chase believes that its long-term growth and success depend on its ability to attract, develop and retain a high-performing and diverse workforce, with inclusion and accessibility as key components of the way the Firm does business. The information provided below relates to JPMorgan Chase’s full-time and part-time employees and does not include the Firm’s contractors.


JPM Global workforce

As of December 31, 2023, JPMorgan Chase had 309,926 employees globally, an increase of 16,203 employees from the prior year. The increase was primarily attributable to growth in front office, operations and technology, as well as the impact of the First Republic acquisition. The Firm’s employees are located in 65 countries, with 60% of the Firm’s employees located in the U.S. The following table presents the distribution of the Firm’s global workforce by region and by line of business (“LOB”) and Corporate as of December 31, 2023: ##Employee Breakdown by Region######Employee Breakdown by LOB and Corporate## Region####Employees##LOB####Employees North America##186,751####CCB##141,640## Asia-Pacific##88,406####CIB##74,404## Europe/Middle East/Africa##29,583####CB##17,867## Latin America/Caribbean##5,186####AWM##28,485## Total Firm##309,926####Corporate##47,530## ######Total Firm##309,926##


JPM Diversity, equity and inclusion

The following table presents information based on voluntary self-identifications by the Firm’s employees and members of the Board of Directors, as of December 31, 2023. Information on race/ethnicity of employees is categorized based on Equal Employment Opportunity (“EEO”) classifications and is presented for U.S. employees who self-identified, and information on gender is presented for global employees who self-identified. Information on race/ethnicity and gender for members of the Operating Committee and the Board of Directors reflects all such members. Information on LGBTQ+ and veteran statuses is based on all U.S. employees, and all members of the Operating Committee and the Board of Directors. Information on disability status is based on all U.S. employees and all members of the Operating Committee. December 31, 2023##Total employees####Senior level employees(e)####Operating Committee####Board of Directors(f)#### Race/Ethnicity(a):################## White##43##%##75##%##88##%##82##%## Hispanic##21##%##6##%##6##%##—#### Asian##19##%##13##%##6##%##—#### Black##14##%##5##%##—####18##%## Other(b)##3##%##1##%##—####—#### Gender(c):################## Men##51##%##72##%##59##%##55##%## Women##49##%##28##%##41##%##45##%## LGBTQ+(d)##4##%##3##%##6##%##—#### Military veterans(d)##3##%##2##%##—####9##%## People with disabilities(d)##4##%##3##%##—####—####(g)


JPM Diversity, equity and inclusion

(a)Based on EEO metrics. Presented as a percentage of the respective populations who self-identified race/ethnicity, which was 96% and 94% of the Firm’s total U.S.-based employees and U.S.-based senior level employees, respectively, and all members of the Operating Committee and the Board of Directors. Information for the Operating Committee includes one member who is based outside of the U.S.


JPM Diversity, equity and inclusion

(b)Other includes American Indian or Alaskan Native, Native Hawaiian or Other Pacific Islander, and two or more races/ethnicities.


JPM Diversity, equity and inclusion

(c)Presented as a percentage of the respective populations who self-identified gender, which was 98% of the Firm’s total global employees and 99% of the Firm’s global senior level employees, and all members of the Operating Committee and the Board of Directors.


JPM Diversity, equity and inclusion

(d)Presented as a percentage of total U.S.-based employees, total U.S.-based senior level employees, all members of the Operating Committee, and all members of the Board of Directors, respectively.


JPM Diversity, equity and inclusion

(e)Senior level employees represents employees with the titles of Managing Director and above.


JPM Diversity, equity and inclusion

(f)Excludes Mark A. Weinberger, who was elected to the Firm’s Board of Directors, effective January 16, 2024.


JPM Diversity, equity and inclusion

(g)The Firm did not request members of the Board of Directors to self-identify disability status.


JPM Firm culture

The foundations of JPMorgan Chase’s culture are its purpose, values and “Business Principles.” The “Business Principles” are guiding principles established by the Firm, which it believes are fundamental to the Firm’s success, and are represented by four central corporate tenets: exceptional client service; operational excellence; a commitment to integrity, fairness and responsibility; and cultivation of a great team and winning culture. The Firm maintains its focus on its culture of inclusion and respect, which is reinforced by its Code of Conduct and by increasing employee awareness, education, communication and training. An important part of these efforts includes the Firm’s Business Resource Groups, which are groups of employees who support JPMorgan Chase’s diversity, equity and inclusion strategies by leveraging the unique perspectives of their members. The Firm has global Diversity, Equity & Inclusion centers of excellence that lead the Firm’s strategy in supporting its commitments to create more equity and lasting impact in communities, and strengthen its inclusive culture.


JPM Attracting and retaining employees

The goal of JPMorgan Chase’s recruitment efforts is to attract and hire talented individuals in all roles and at all career levels. The Firm strives to provide both external candidates and internal employees who are seeking a different role with challenging and stimulating career opportunities. These opportunities range from internship training programs for students to entry-level, management and executive careers. During 2023, approximately 60% of the Firm’s employment opportunities were filled by external candidates, with the remainder filled by existing employees. In addition, depending on business needs, and where appropriate, the Firm continues to employ hybrid work models which include a mix of on-site and remote work for certain roles.


JPM Attracting and retaining employees

Attracting talent with diverse backgrounds and perspectives is an important area of focus throughout the Firm’s recruitment process. JPMorgan Chase sources talent by engaging in efforts aimed at building and fostering an inclusive work environment. The Firm’s global Diversity, Equity & Inclusion centers of excellence support its diversity, equity and inclusion strategies through initiatives such as career coaching and mentorship.


JPM Attracting and retaining employees

JPMorgan Chase offers a competitive fellowship program that seeks to attract accomplished individuals who have taken a career break and wish to return to the workforce. In addition, and where appropriate, the Firm’s hiring practices focus on the skills of a job candidate rather than degrees held.


JPM Developing employees

JPMorgan Chase supports the professional development and career growth of its employees. An onboarding training curriculum is required for new hires which covers, among other topics, compliance with the Firm’s Code of Conduct and information concerning Firm policies and standards, including those relating to cybersecurity. In addition, the Firm offers extensive training programs and educational resources to all employees covering a broad variety of topics such as leadership, change management, analytical thinking, culture and conduct, diversity, equity and inclusion, and risk and controls. Leadership Edge, the Firm’s global leadership and management development center of excellence, is focused on creating one Firmwide leadership culture.


JPM Compensation and benefits

The Firm provides market-competitive compensation and benefits programs. JPMorgan Chase’s compensation philosophy includes guiding principles that drive compensation-related decisions across the Firm, and includes: pay-for-performance practices designed to attract and retain top talent; responsiveness and alignment with shareholder interests; and reinforcement of the Firm’s culture and Business Principles. The Firm follows a disciplined and balanced compensation framework, including the integration of risk, controls and conduct considerations. The Firm’s compensation review processes seek to ensure that the Firm’s employees are paid equitably and competitively for the work they do.


JPM Compensation and benefits

JPMorgan Chase offers extensive benefits and wellness packages to support employees and their families, which vary depending on location and include healthcare coverage, retirement benefits, life and disability insurance, access to on-site health and wellness centers, counseling and resources related to mental health, competitive vacation and leave policies, child care access and support, tuition reimbursement programs, and financial coaching. In 2023, the Firm further enhanced its health and wellness benefits for U.S. employees, including updates to the U.S. medical plan, as well as expedited access to an expanded network of professionals for free mental health counseling and coaching.


JPM Supervision and regulation

The Firm is subject to extensive and comprehensive regulation under U.S. federal and state laws, as well as the applicable laws of the jurisdictions outside the U.S. in which the Firm does business.


JPM Supervision and regulation

Financial holding company:


JPM Supervision and regulation

Consolidated supervision. JPMorgan Chase & Co. is a bank holding company (“BHC”) and a financial holding company (“FHC”) under U.S. federal law, and is subject to comprehensive consolidated supervision, regulation and examination by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). The Federal Reserve acts as the supervisor of the consolidated operations of BHCs. Certain of JPMorgan Chase’s subsidiaries are also regulated directly by additional authorities based on the activities or licenses of those subsidiaries.


JPM Supervision and regulation

JPMorgan Chase’s national bank subsidiary, JPMorgan Chase Bank, N.A., is supervised and regulated by the Office of the Comptroller of the Currency (“OCC”) and, with respect to certain matters, by the Federal Deposit Insurance Corporation (the “FDIC”).


JPM Supervision and regulation

JPMorgan Chase’s U.S. broker-dealers are supervised and regulated by the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”). Subsidiaries of the Firm that engage in certain futures-related and swaps-related activities are supervised and regulated by the Commodity Futures Trading Commission (“CFTC”). J.P. Morgan Securities plc holds a banking license in the U.K. and is regulated by the U.K. Prudential Regulation Authority (the “PRA”) and the U.K. Financial Conduct Authority (“FCA”).


JPM Supervision and regulation

JPMSE is a Germany-based credit institution regulated by the European Central Bank (“ECB”) as well as the local regulators in each of the countries in which it operates. The Firm’s other non-U.S. subsidiaries are regulated by the banking, securities, prudential, payments and conduct regulatory authorities, as applicable, in the countries in which they operate.


JPM Supervision and regulation

Permissible business activities. The Bank Holding Company Act restricts BHCs from engaging in business activities other than the business of banking and certain closely-related activities. FHCs are permitted to engage in a broader range of financial activities. The Federal Reserve has the authority to limit an FHC’s ability to conduct otherwise permissible activities if the FHC or any of its depository institution subsidiaries ceases to meet applicable eligibility requirements. The Federal Reserve may also impose corrective capital and/or managerial requirements on the FHC, and if deficiencies are persistent, may require divestiture of the FHC’s depository institutions. If any depository institution controlled by an FHC fails to maintain a satisfactory rating under the Community Reinvestment Act, the Federal Reserve must prohibit the FHC and its subsidiaries from engaging in any new activities other than


JPM Supervision and regulation

those permissible for BHCs, or acquiring a company engaged in such activities.


JPM Supervision and regulation

Capital and liquidity requirements. The Federal Reserve establishes capital, liquidity and leverage requirements for JPMorgan Chase that are generally consistent with the international Basel III capital and liquidity framework and evaluates the Firm’s compliance with those requirements. The OCC establishes similar requirements for JPMorgan Chase Bank, N.A. Certain of the Firm’s non-U.S. subsidiaries and branches are also subject to local capital and liquidity requirements.


JPM Supervision and regulation

Banking supervisors globally continue to refine and enhance the Basel III capital framework for financial institutions. In July 2023, U.S. banking regulators released a proposal to amend the U.S. risk-based capital framework to incorporate certain elements of the revised international Basel III capital framework. The proposal would significantly revise risk-based capital requirements for banks with assets of $100 billion or more, including the Firm and other U.S. global systemically important banks ("GSIBs"). The proposed effective date is July 1, 2025 with a three-year transition period.


JPM Supervision and regulation

In addition to the release of the U.S. proposal, the EU and U.K. regulators have also largely finalized the rules implementing their Basel III frameworks. The proposed effective dates are January 1, 2025, in the EU and July 1, 2025, in the U.K., with certain transitional arrangements applicable until 2030 and 2032, respectively.


JPM Supervision and regulation

Stress tests. As a large BHC, JPMorgan Chase is subject to supervisory stress testing administered by the Federal Reserve as part of the Federal Reserve’s annual Comprehensive Capital Analysis and Review (“CCAR”) framework. The Firm must conduct annual company-run stress tests and must also submit an annual capital plan to the Federal Reserve, taking into account the results of separate stress tests designed by each of the Firm and the Federal Reserve. The Federal Reserve uses the results under the severely adverse scenario from its supervisory stress test to determine the Firm’s Stress Capital Buffer (“SCB”) requirement for the coming year, which forms part of the Firm’s applicable capital buffers. The Firm is required to file its annual CCAR submission on April 5, 2024. The Federal Reserve will notify the Firm of its indicative SCB requirement by June 30, 2024 and final SCB requirement by August 31, 2024. The Firm’s final SCB requirement will become effective on October 1, 2024. The OCC requires JPMorgan Chase Bank, N.A. to perform separate, similar stress tests annually. The Firm publishes each year the results of the annual stress tests for the Firm and JPMorgan Chase Bank, N.A. under the supervisory “severely adverse” scenarios provided by the Federal Reserve and the OCC.


JPM Supervision and regulation

Refer to Capital Risk Management on pages 91-101 and Liquidity Risk Management on pages 102–109 for more information.


JPM Supervision and regulation

Enhanced prudential standards. As part of its mandate to identify and monitor risks to the financial stability of the U.S. posed by large banking organizations, the Financial Stability Oversight Council (“FSOC”) recommends prudential standards and reporting requirements to the Federal Reserve for systemically important financial institutions (“SIFIs”), such as JPMorgan Chase. The Federal Reserve has adopted several rules to implement those heightened prudential standards, including rules relating to risk management and corporate governance of subject BHCs. JPMorgan Chase is required under these rules to comply with enhanced liquidity and overall risk management standards, including oversight by the board of directors of risk management activities.


JPM Supervision and regulation

Resolution and recovery. The Firm is required to maintain a comprehensive recovery plan, which is updated annually and which summarizes the actions that it would take to remain well-capitalized and well-funded in order to avoid failure in the case of an adverse event. In addition, JPMorgan Chase Bank, N.A. is required to prepare and submit a recovery plan as directed by the OCC. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Firm is required to submit periodically to the Federal Reserve and the FDIC a plan for resolution (a “resolution plan”) under the Bankruptcy Code in the event of material distress or failure. Under rules adopted by the FDIC and the Federal Reserve, the Firm’s resolution plan submissions under the Dodd-Frank Act alternate between “targeted” and “full” plans. The Firm’s most recent “full” resolution plan was filed on June 30, 2023, and the Firm's next "targeted" resolution plan is due to be filed on or before July 1, 2025. JPMorgan Chase Bank, N.A. is also required to prepare and submit a separate resolution plan pursuant to a separate FDIC regulation that requires FDIC-insured depository institutions over a certain asset threshold to prepare a resolution plan to facilitate their resolution by the FDIC under the Federal Deposit Insurance Act (the “IDI Resolution Rule”). JPMorgan Chase Bank, N.A. most recently filed a resolution plan pursuant to the IDI Resolution Rule on December 1, 2023.


JPM Supervision and regulation

In August 2023, the FDIC released a proposal to revise the IDI Resolution Rule. For FDIC-insured depository institutions with $100 billion or more in total assets, such as JPMorgan Chase Bank, N.A., the proposal would revise the content requirements for resolution plan submissions, increase the frequency of resolution plan submissions to every two years (instead of the current three-year cycle) and require the filing of interim supplements in non-submission years. The proposal would also enhance how the FDIC assesses the credibility of resolution plan submissions, expand the FDIC’s expectations regarding bank engagement with FDIC staff and capabilities testing, and outline expectations regarding the FDIC’s review and enforcement of compliance with the IDI Rule.


JPM Supervision and regulation

Certain of the Firm’s non-U.S. subsidiaries and branches are also subject to local resolution and recovery planning requirements.


JPM Supervision and regulation

Orderly liquidation authority. Certain financial companies, including JPMorgan Chase and certain of its subsidiaries, can also be subjected to resolution under the “orderly liquidation authority” rather than under the Bankruptcy Code. In order to invoke the orderly liquidation authority, the U.S. Treasury Secretary, in consultation with the President of the United States, must first make certain determinations concerning extraordinary financial distress and systemic risk, and action must be recommended by the FDIC and the Federal Reserve. Absent such actions, the Firm, as a BHC, would remain subject to resolution under the Bankruptcy Code. The FDIC has issued a draft policy statement describing its “single point of entry” strategy for resolution of SIFIs under the orderly liquidation authority, which seeks to keep operating subsidiaries of a BHC open and impose losses on shareholders and creditors of the BHC in receivership according to their statutory order of priority.


JPM Supervision and regulation

Holding company as a source of strength. JPMorgan Chase & Co. is required to serve as a source of financial strength for its depository institution subsidiaries and to commit resources to support those subsidiaries, including when directed to do so by the Federal Reserve.


JPM Supervision and regulation

Regulation of acquisitions. Acquisitions by BHCs and their banks are subject to requirements, limitations and prohibitions established by law and by the Federal Reserve and the OCC. For example, FHCs and BHCs are required to obtain the approval of the Federal Reserve before they acquire more than 5% of the voting shares of an unaffiliated bank. In addition, acquisitions by financial companies are generally prohibited if, as a result of the acquisition, the total liabilities of the financial company would exceed 10% of the total liabilities of all financial companies, as determined under Federal Reserve regulations. Furthermore, for certain acquisitions, the Firm must provide written notice to the Federal Reserve prior to acquiring direct or indirect ownership or control of any voting shares of any company with over $10 billion in assets that is engaged in activities that are “financial in nature.” Moreover, while FHCs may engage in a broader range of activities (including acquisitions) than BHCs, the Federal Reserve has the authority to limit an FHC’s ability to conduct otherwise permissible acquisitions if the FHC or any of its depository institution subsidiaries ceases to meet applicable eligibility requirements.


JPM Supervision and regulation

Ongoing obligations. The Firm is subject to a Deferred Prosecution Agreement entered into with the Department of Justice on September 29, 2020, relating to precious metals and U.S. Treasuries markets investigations, as well as a cooperation obligation under a related order issued by the CFTC.


JPM Supervision and regulation

Subsidiary banks:


JPM Supervision and regulation

The activities of JPMorgan Chase Bank, N.A., the Firm’s principal subsidiary bank, are limited to those specifically authorized under the National Bank Act and related interpretations of the OCC. The OCC has authority to bring an enforcement action against JPMorgan Chase Bank, N.A.


JPM Part I

for unsafe or unsound banking practices, which could include limiting JPMorgan Chase Bank, N.A.’s ability to conduct otherwise permissible activities, or imposing corrective capital or managerial requirements on the bank.


JPM Part I

FDIC deposit insurance. The FDIC deposit insurance fund provides insurance coverage for certain deposits and is funded through assessments on banks, including JPMorgan Chase Bank, N.A. The FDIC is required to maintain a minimum reserve ratio, which measures the balance of reserves in the deposit insurance fund against an estimate of FDIC-insured deposits, of 1.35%. The reserve ratio is currently below the statutory minimum and, in October 2022, the FDIC adopted a final rule to raise bank assessments and accelerate the time by which the reserve ratio would meet the statutory minimum. As a result, the FDIC has adopted a restoration plan to bring the reserve ratio up to the required 1.35% by September 30, 2028, with a longer-term target of maintaining a reserve ratio of 2%.


JPM Part I

FDIC powers upon a bank insolvency. Upon any insolvency of JPMorgan Chase Bank, N.A., the FDIC could be appointed as conservator or receiver under the Federal Deposit Insurance Act. The FDIC has broad powers to transfer assets and liabilities without the approval of the institution’s creditors.


JPM Part I

Prompt corrective action. The Federal Deposit Insurance Corporation Improvement Act of 1991 requires the relevant federal banking regulator to take “prompt corrective action” with respect to a depository institution if that institution does not meet certain capital adequacy standards. The Federal Reserve is also authorized to take appropriate action against the parent BHC, such as JPMorgan Chase & Co., based on the undercapitalized status of any bank subsidiary. In certain instances, the BHC would be required to guarantee the performance of the capital restoration plan for its undercapitalized subsidiary.


JPM Part I

Heightened Supervisory Standards. In the U.S., the OCC has established guidelines setting forth heightened standards for large banks, including minimum standards for the design and implementation of a risk governance framework for banks. Under these standards, a bank’s risk governance framework must ensure that the bank’s risk profile is easily distinguished and separate from that of its parent BHC for risk management purposes. The bank’s board or risk committee is responsible for approving the bank’s risk governance framework, providing active oversight of the bank’s risk-taking activities, and holding management accountable for adhering to the risk governance framework.


JPM Part I

The Firm’s banking entities in the EU and the U.K. are subject to supervisory expectations published by the ECB and the PRA, respectively, addressing bank strategy, governance and risk management in the areas of climate change, operational resilience, reliance on IT systems and third-party services, and resilience from macro-financial and geopolitical shocks. Further, the EU requires that certain non-EU banking groups operating in the EU establish


JPM Part I

an intermediate parent undertaking (“IPU”) located in the EU or, with ECB approval, two IPUs if a single IPU would conflict with “home country” bank separation rules or impede resolvability. The Firm was granted approval by the ECB in May 2023 to have two IPUs, which will hold the Firm’s EU banks and broker-dealers.


JPM Part I

Restrictions on transactions with affiliates. JPMorgan Chase Bank, N.A. and its subsidiaries are subject to restrictions imposed by federal law on extensions of credit to, investments in stock or securities of, and derivatives, securities lending and certain other transactions with, JPMorgan Chase & Co. and certain other affiliates. These restrictions prevent JPMorgan Chase & Co. and other affiliates from borrowing from JPMorgan Chase Bank, N.A. and its subsidiaries unless the loans are secured in specified amounts and comply with certain other requirements.


JPM Part I

Dividend restrictions. Federal law imposes limitations on the payment of dividends by national banks, such as JPMorgan Chase Bank, N.A. Refer to Note 26 for the amount of dividends that JPMorgan Chase Bank, N.A. could pay, at January 1, 2024, to JPMorgan Chase without the approval of the banking regulators. The OCC and the Federal Reserve also have authority to prohibit or limit the payment of dividends of a bank subsidiary that they supervise if, in the banking regulator’s opinion, payment of a dividend would constitute an unsafe or unsound practice in light of the financial condition of the bank.


JPM Part I

Depositor preference. Under federal law, the claims of a receiver of an insured depositary institution (“IDI”) for administrative expense and the claims of holders of U.S. deposit liabilities (including the FDIC and deposits in non-U.S. branches that are dually payable in the U.S. and in a non-U.S. branch) have priority over the claims of other unsecured creditors of the institution, including depositors in non-U.S. branches and public noteholders.


JPM Part I

Consumer supervision and regulation. JPMorgan Chase and JPMorgan Chase Bank, N.A. are subject to supervision and regulation in the U.S. by the Consumer Financial Protection Bureau (“CFPB”) with respect to federal consumer protection laws, including laws relating to fair lending and the prohibition of unfair, deceptive or abusive acts or practices in connection with the offer, sale or provision of consumer financial products and services. The CFPB also has jurisdiction over small business lending activities with respect to fair lending and the Equal Credit Opportunity Act. As part of its regulatory oversight, the CFPB has authority to take enforcement actions against firms that offer certain products and services to consumers using practices that are deemed to be unfair, deceptive or abusive. In February 2023, the CFPB proposed a rule that would significantly reduce and limit the late payment fees that credit card issuers, including the Firm, would be permitted to charge to customers. In January 2024, the CFPB proposed a rule that could significantly restrict bank overdraft fees for certain insured depository institutions, including the Firm. The proposal would impose certain requirements on overdraft


JPM Part I

protections, similar to those that apply to credit cards, unless the financial institution prices the overdraft fee at the institution’s cost to provide the product or at a benchmark determined by the CFPB. In October 2023, the Federal Reserve Board proposed to lower the maximum interchange fee that large debit card issuers, including the Firm, would be permitted to receive for a debit card transaction. The proposal would also establish a process for automatically publishing an updated maximum fee amount every other year going forward. The Firm’s consumer activities are also subject to regulation under state statutes which are enforced by the Attorney General or empowered agency of each state.


JPM Part I

In the U.K., the Firm operates a retail bank through J.P. Morgan Europe Limited (“JPMEL”) and provides retail investment management services through Nutmeg Saving and Investment Limited (“Nutmeg”). JPMEL is regulated by the PRA, and both JPMEL and Nutmeg are regulated by the FCA with respect to their conduct of financial services in the U.K., including obligations relating to the fair treatment of customers. JPMEL is also regulated by the U.K. Payment Systems Regulator with respect to its operation and use of payment systems. In addition, the retail businesses of JPMEL and Nutmeg are subject to U.K. consumer-protection legislation. The Consumer Duty in the U.K. became effective in July 2023 for U.K.-regulated financial service providers, and encompasses requirements on the types of products and services that should be offered to consumers, how to balance value and pricing for consumers as well as how to promote good consumer understanding and post-sale support to consumers.


JPM Part I

Securities and broker-dealer regulation:


JPM Part I

The Firm conducts securities underwriting, dealing and brokerage activities in the U.S. through J.P. Morgan Securities LLC and other non-bank broker-dealer subsidiaries, all of which are subject to regulations of the SEC, FINRA and the New York Stock Exchange, among others. The Firm conducts similar securities activities outside the U.S. subject to local regulatory requirements. In the U.K., those activities are primarily conducted by J.P. Morgan Securities plc and in the EU, those activities are primarily conducted by JPMSE. Broker-dealers are subject to laws and regulations covering all aspects of the securities business, including sales and trading practices, securities offerings, publication of research reports, use of customer funds, the financing of client purchases, capital structure, record-keeping and retention, and the conduct of their directors, officers and employees. Refer to Broker-dealer regulatory capital on page 101 for information concerning the capital of J.P. Morgan Securities LLC and J.P. Morgan Securities plc. In addition, the Firm's sales and trading activities, which are conducted through both bank and non-bank subsidiaries, are subject to laws and regulations relating to market conduct, including prohibitions on manipulative or anti-competitive practices.


JPM Part I

Investment management regulation:


JPM Part I

The Firm’s asset and wealth management businesses are subject to significant regulation in jurisdictions around the world relating to, among other things, the safeguarding and management of client assets, offerings of funds and marketing activities. Certain of the Firm’s subsidiaries are registered with, and subject to oversight by, the SEC as investment advisers and broker-dealers. The Firm’s registered investment advisers in the U.S. are subject to the fiduciary and other obligations imposed under the Investment Advisers Act of 1940 and applicable state and federal law. The Firm’s bank fiduciary activities are subject to supervision by the OCC.


JPM Part I

The Firm’s asset and wealth management businesses continue to be subject to ongoing rule-making and implementation of new regulations and other guidance, including by the SEC and certain U.S. states with respect to enhanced standards of conduct and conflicts of interest. In October 2023, the Department of Labor (“DOL”) proposed a new “fiduciary” rule that could significantly expand the scope for defining who can be deemed investment advice fiduciaries for purposes of retirement plans and individual retirement accounts (“IRAs”) under the Employee Retirement Income Security Act of 1974, as amended. Among the most significant impacts of the proposed rule and related amendments to prohibited transaction exemptions would be the impact on the fee and compensation practices at financial institutions that offer investment recommendations to retirement clients, including in the context of rollovers from an employer plan to an IRA.


JPM Part I

Derivatives regulation:


JPM Part I

The Firm is subject to comprehensive regulation of its derivatives businesses. In the U.S., JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC and J.P. Morgan Securities plc are registered with the CFTC as “swap dealers”. In addition, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC are registered with the SEC as “security-based swap dealers”. As a result, these entities are subject to a comprehensive regulatory framework applicable to their swap or security-based swap activities, including capital requirements, rules requiring the collateralization of uncleared swaps and security-based swaps, rules regarding segregation of counterparty collateral, business conduct and documentation standards, rules requiring the central clearing of standardized over-the-counter (“OTC”) derivatives, requirements that certain standardized OTC swaps be traded on regulated trading venues, record-keeping and reporting obligations, and anti-fraud and anti-manipulation requirements. Similar requirements have also been established in the European Union (“EU”) under the European Market Infrastructure Regulation (“EMIR”) and the Markets in Financial Instruments Directive (“MiFID II”), as well as in the U.K. and other jurisdictions around the world.


JPM Part I

J.P. Morgan Securities LLC is also registered with the CFTC as a futures commission merchant and is a member of the National Futures Association.


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Data, privacy and cybersecurity regulation:


JPM Part I

The Firm and its subsidiaries are subject to laws, rules and regulations globally concerning data, including data protection, consumer protection, privacy, cybersecurity and related matters. These laws, rules and regulations are constantly evolving, subject to interpretation, remain a focus of regulators globally, may be enforced by private parties or government bodies, and continue to have a significant impact on all of the Firm’s businesses and operations.


JPM Part I

The Bank Secrecy Act and Economic Sanctions:


JPM Part I

The Bank Secrecy Act (“BSA”) requires all financial institutions, including banks and securities broker-dealers, to establish a risk-based system of internal controls reasonably designed to prevent money laundering and the financing of terrorism. The BSA includes a variety of record-keeping and reporting requirements, as well as due diligence/know-your-customer documentation requirements. The Firm is also subject to the regulations and economic sanctions programs administered and enforced by the U.S. Treasury’s Office of Foreign Assets Control (“OFAC”) and EU and U.K. authorities which target entities or individuals that are, or are located in countries that are, involved in activities including terrorism, hostilities, embezzlement or human rights violations. The Firm is also subject to economic sanctions laws, rules and regulations in other jurisdictions in which it operates, including those that conflict with or prohibit a firm such as JPMorgan Chase from complying with certain laws, rules and regulations to which it is otherwise subject.


JPM Part I

Anti-Corruption:


JPM Part I

The Firm is subject to laws and regulations relating to corrupt and illegal payments to government officials and others in the jurisdictions in which it operates, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act.


JPM Part I

Compensation practices:


JPM Part I

The Firm’s compensation practices are subject to oversight by the Federal Reserve, as well as other agencies. The Federal Reserve has jointly issued guidance with the FDIC and the OCC that is designed to ensure that incentive compensation paid by banking organizations does not encourage imprudent risk-taking that threatens the organizations’ safety and soundness. The Financial Stability Board (“FSB”) has also established standards covering compensation principles for banks. The Firm’s compensation practices are also subject to regulation and oversight by regulators in other jurisdictions, notably the Fifth Capital Requirements Directive (“CRD V”), as implemented in the EU and as largely adopted in the U.K, which includes compensation-related provisions. The European Banking Authority has instituted guidelines on compensation policies including under CRD V which in certain countries (such as Germany) are implemented or


JPM Part I

supplemented by local regulations or guidelines. The U.K. regulators have also instituted regulations and guidelines on compensation policies, which diverge in certain areas from EU rules. The Firm expects that the implementation of regulatory guidelines regarding compensation in the U.S. and other countries will continue to evolve, and may affect the manner in which the Firm structures its compensation programs and practices.


JPM Part I

Sustainability:


JPM Part I

Policymakers in the U.K. and the EU have continued to implement and enhance sustainability-related initiatives and disclosure requirements. The Corporate Sustainability Reporting Directive (“CSRD”) will replace and significantly expand the scope and content of certain EU ESG reporting requirements, with phased-in requirements starting with fiscal years in 2024. In addition, in December 2023, the EU reached agreement on the Corporate Sustainability Due Diligence Directive (“CSDDD”). The CSDDD sets mandatory due diligence obligations for companies to address actual and potential human rights violations and environmental adverse impacts stemming from their own operations and business relationships, including the activities of certain companies with which they have established business relationships and also requires the adoption of company-specific climate-related transition plans. Both the CSRD and CSDDD will impact certain of the Firm’s EU and non-EU entities.


JPM Risk Factors

The following discussion sets forth the material risk factors that could affect JPMorgan Chase’s financial condition and operations. Readers should not consider any descriptions of these factors to be a complete set of all potential risks that could affect the Firm. Any of the risk factors discussed below could by itself, or combined with other factors, materially and adversely affect JPMorgan Chase’s business, results of operations, financial condition, capital position, liquidity, competitive position or reputation, including by materially increasing expenses or decreasing revenues, which could result in material losses or a decrease in earnings.


JPM Summary

The principal risk factors that could adversely affect JPMorgan Chase’s business, results of operations, financial condition, capital position, liquidity, competitive position or reputation include: •Regulatory risks, including the impact that applicable laws, rules and regulations in the highly-regulated and supervised financial services industry, as well as changes to or in the application, interpretation or enforcement of those laws, rules and regulations, can have on JPMorgan Chase’s business and operations, including JPMorgan Chase incurring additional costs associated with assessments, levies or other governmental charges; the ways in which differences in financial services regulation and supervision in different jurisdictions or with respect to certain competitors can negatively impact JPMorgan Chase’s business; the penalties and collateral consequences, and higher compliance and operational costs, that JPMorgan Chase may incur when resolving a regulatory investigation; the ways in which less predictable legal and regulatory frameworks in certain jurisdictions can negatively impact JPMorgan Chase’s operations and financial results; and the losses that security holders will absorb if JPMorgan Chase were to enter into a resolution. •Political risks, including the potential negative effects on JPMorgan Chase’s businesses due to economic uncertainty or instability caused by political developments. •Market risks, including the effects that economic and market events and conditions, governmental policies, changes in interest rates and credit spreads, and market fluctuations can have on JPMorgan Chase’s consumer and wholesale businesses and its investment and market-making positions and on JPMorgan Chase’s earnings and its liquidity and capital levels. •Credit risks, including potential negative effects from adverse changes in the financial condition of clients, customers, counterparties, custodians and central counterparties; the potential for losses due to declines in the value of collateral in stressed market conditions; and potential negative impacts from concentrations of credit risk with respect to clients, customers, counterparties and other market participants. •Liquidity risks, including the risk that JPMorgan Chase’s liquidity could be impaired by market-wide illiquidity or disruption, unforeseen liquidity or capital requirements, the inability to sell assets, default by a significant market participant, unanticipated outflows of cash or collateral, or lack of market or customer confidence in JPMorgan Chase; the dependence of JPMorgan Chase & Co. on the cash flows of its subsidiaries; and the potential adverse effects that any downgrade in any of JPMorgan Chase’s credit ratings may have on its liquidity and cost of funding. •Capital risks, including the risk that any failure by or inability of JPMorgan Chase to maintain the required level and composition of capital, or unfavorable changes in applicable capital requirements, could limit JPMorgan Chase’s ability to distribute capital to shareholders or to support its business activities. •Operational risks, including risks associated with JPMorgan Chase’s dependence on its operational systems, its ability to maintain appropriately-staffed workforces and the competence, integrity, health and safety of its employees, as well as the systems and employees of third parties, market participants and service providers; the potential negative effects of failing to identify and address operational risks related to the failure of internal or external operational systems, the introduction of or changes to products, services and delivery platforms or the adoption of new technologies; legal and regulatory risks related to safeguarding personal information; the harm that could be caused by a successful cyber attack affecting JPMorgan Chase or by other extraordinary events; risks related to acquisitions, including the acquisition of certain assets and liabilities of First Republic Bank; risks associated with JPMorgan Chase’s risk management framework and control environment, its models and estimations and associated judgments used in its stress testing and financial statements, and controls over disclosure and financial reporting; and potential adverse effects of failing to comply with heightened regulatory and other standards for the oversight of vendors and other service providers. •Strategic risks, including the damage to JPMorgan Chase’s competitive standing and results that could occur if management fails to develop and execute effective business strategies; risks associated with the significant and increasing competition that JPMorgan Chase faces; and the potential adverse impacts of climate change on JPMorgan Chase’s business operations, clients and customers. •Conduct risks, including the negative impact that can result from the actions or misconduct of employees, including any failure of employees to conduct themselves in accordance with JPMorgan Chase’s expectations, policies and practices. •Reputation risks, including the potential adverse effects on JPMorgan Chase’s relationships with its clients,


JPM Part I

customers, shareholders, regulators and other stakeholders that could arise from employee misconduct, security breaches, inadequate risk management, compliance or operational failures, litigation and regulatory investigations, failure to satisfy expectations concerning environmental, social and governance concerns, failure to effectively manage conflicts of interest or to satisfy fiduciary obligations, or other factors that could damage JPMorgan Chase’s reputation. •Country risks, including potential impacts on JPMorgan Chase’s businesses from an outbreak or escalation of hostilities between countries or within a country or region; and the potential adverse effects of local economic, political, regulatory and social factors on JPMorgan Chase’s business and revenues in certain countries in which it operates. •People risks, including the criticality of attracting and retaining qualified and diverse employees; and the potential adverse effects of unfavorable changes in immigration or travel policies on JPMorgan Chase’s workforce. •Legal risks, including those relating to litigation and regulatory and government investigations.


JPM Part I

The above summary is subject in its entirety to the discussion of the risk factors set forth below.


JPM Regulatory

JPMorgan Chase’s businesses are highly regulated, and the laws, rules and regulations that apply to JPMorgan Chase have a significant impact on its business and operations.


JPM Regulatory

JPMorgan Chase is a financial services firm with operations worldwide. JPMorgan Chase must comply with the laws, rules and regulations that apply to its operations in all of the jurisdictions around the world in which it does business, and financial services firms such as JPMorgan Chase are subject to extensive and constantly-evolving regulation and supervision.


JPM Regulatory

The regulation and supervision of JPMorgan Chase significantly affects the way that it conducts its business and structures its operations, and JPMorgan Chase could be required to make changes to its business and operations in response to supervisory expectations or decisions or to new or changed laws, rules and regulations. These types of developments could result in JPMorgan Chase incurring additional costs or experiencing a reduction in revenues to comply with applicable laws, rules and regulations, which could reduce its profitability. Furthermore, JPMorgan Chase’s entry into or acquisition of a new business or an increase in its principal investments may require JPMorgan Chase to comply with additional laws, rules, and regulations.


JPM Regulatory

In response to new and existing laws, rules and regulations and expanded supervision, JPMorgan Chase has in the past been and could in the future be, required to: •limit the products and services that it offers •reduce the liquidity that it can provide through its market-making activities •refrain from engaging in business opportunities that it might otherwise pursue •pay higher taxes (including as part of any minimum global tax regime), assessments, levies or other governmental charges, including in connection with the resolution of tax examinations •incur losses, including with respect to fraudulent transactions perpetrated against its customers •dispose of certain assets, and do so at times or prices that are disadvantageous •impose restrictions on certain business activities, or •increase the prices that it charges for products and services, which could reduce the demand for them.


JPM Regulatory

Any failure by JPMorgan Chase to comply with the laws, rules and regulations to which it is subject could result in: •increased regulatory and supervisory scrutiny •regulatory and governmental enforcement actions •the imposition of fines, penalties or other sanctions •increased exposure to litigation, or •harm to its reputation.


JPM Regulatory

Differences and inconsistencies in financial services regulation and supervision can negatively impact JPMorgan Chase’s businesses, operations and financial results.


JPM Regulatory

The content and application of laws, rules and regulations affecting financial services firms can vary according to factors such as the size of the firm, the jurisdiction in which it is organized or operates, and other criteria. For example: •larger firms such as JPMorgan Chase are often subject to more stringent supervision, regulation and regulatory scrutiny •financial technology companies and other non-traditional competitors may not be subject to banking regulation, or may be supervised by a national or state regulatory agency that does not have the same resources or regulatory priorities as the regulatory agencies which supervise more diversified financial services firms, or •the financial services regulatory and supervisory framework in a particular jurisdiction may favor financial institutions that are based in that jurisdiction.


JPM Regulatory

These types of differences in the regulatory and supervisory framework can result in JPMorgan Chase losing market share to competitors that are less regulated or not subject to regulation, especially with respect to unregulated financial products.


JPM Regulatory

There can also be significant differences in the ways that similar regulatory initiatives affecting the financial services industry are implemented in the U.S. and in other countries and regions in which JPMorgan Chase does business. For example, when adopting rules that are intended to implement a global regulatory or supervisory standard, a national regulator may introduce additional or more restrictive requirements, which can create competitive disadvantages for financial services firms, such as JPMorgan Chase, that may be subject to those enhanced regulations.


JPM Regulatory

In addition, certain national and multi-national bodies and governmental agencies outside the U.S. have adopted laws, rules or regulations that may conflict with or prohibit JPMorgan Chase from complying with laws, rules and regulations to which it is otherwise subject, creating conflict of law issues that also increase its risk of non-compliance in those jurisdictions.


JPM Regulatory

Legislative and regulatory initiatives outside the U.S. could require JPMorgan Chase to make significant modifications to its operations and legal entity structure in the relevant countries or regions in order to comply with those requirements. These include laws, rules and regulations that have been adopted or proposed, as well as regulatory expectations, relating to: •the establishment of locally-based intermediate holding companies or operating subsidiaries •requirements to maintain minimum amounts of capital or liquidity in locally-based subsidiaries •the implementation of processes within locally-based subsidiaries to comply with local regulatory requirements or expectations •the separation (or “ring fencing”) of core banking products and services from markets activities •requirements for the orderly resolution of financial institutions •requirements for executing or settling transactions on exchanges or through central counterparties (“CCPs”), or for depositing funds with other financial institutions or clearing and settlement systems •position limits and reporting rules for derivatives •governance and accountability regimes •conduct of business and control requirements, and •restrictions on compensation.


JPM Regulatory

These types of differences, inconsistencies and conflicts in financial services regulation have required and could in the future require JPMorgan Chase to: •divest assets or restructure its operations •maintain higher levels of capital and liquidity, or absorb increased capital and liquidity costs •incur higher operational and compliance costs •change the prices that it charges for its products and services •curtail the products and services that it offers to its customers and clients •curtail other business opportunities, including acquisitions or principal investments, that it otherwise would have pursued •become subject to regulatory fines, penalties or other sanctions, or •incur higher costs for complying with different legal and regulatory frameworks.


JPM Regulatory

Any or all of these factors could harm JPMorgan Chase’s ability to compete against other firms that are not subject to the same laws, rules and regulations or supervisory oversight, or harm JPMorgan Chase’s businesses, results of operations and profitability.


JPM Regulatory

Resolving regulatory investigations can subject JPMorgan Chase to significant penalties and collateral consequences, and could result in higher compliance costs or restrictions on its operations.


JPM Regulatory

JPMorgan Chase is subject to heightened oversight and scrutiny from regulatory authorities in many jurisdictions. JPMorgan Chase has paid significant fines, provided other monetary relief, incurred other penalties and experienced other repercussions in connection with resolving investigations and enforcement actions by governmental agencies. JPMorgan Chase could become subject to similar regulatory or governmental resolutions or other actions in the future, and addressing the requirements of any such resolutions or actions could result in JPMorgan Chase incurring higher operational and compliance costs, including devoting substantial resources to the required remediation or needing to comply with other restrictions.


JPM Regulatory

In connection with resolving specific regulatory investigations or enforcement actions, certain regulators have required JPMorgan Chase and other financial institutions to admit wrongdoing with respect to the activities that gave rise to the resolution. These types of admissions can lead to: •greater exposure in litigation •damage to JPMorgan Chase’s reputation •disqualification from doing business with certain clients or customers, or in specific jurisdictions, or •other direct and indirect adverse effects.


JPM Regulatory

Furthermore, government officials in the U.S. and other countries have demonstrated a willingness to bring criminal actions against financial institutions and have required that institutions plead guilty to criminal offenses or admit other wrongdoing in connection with resolving regulatory investigations or enforcement actions. Resolutions of this type can have significant collateral consequences for the subject financial institution, including: Part I •loss of clients, customers and business •restrictions on offering certain products or services, and •losing permission to operate certain businesses, either temporarily or permanently.


JPM Regulatory

JPMorgan Chase expects that: •it and other financial services firms will continue to be subject to heightened regulatory scrutiny and governmental investigations and enforcement actions •governmental authorities will continue to require that financial institutions be penalized for actual or deemed violations of law with formal and punitive enforcement actions, including the imposition of significant monetary and other sanctions, rather than resolving these matters through informal supervisory actions; and •governmental authorities will be more likely to pursue formal enforcement actions and resolutions against JPMorgan Chase to the extent that it has previously been subject to other governmental investigations or enforcement actions.


JPM Regulatory

If JPMorgan Chase fails to meet the requirements of any resolution of a governmental investigation or enforcement action, or to maintain risk and control processes that meet the heightened standards and expectations of its regulators, it could be required to, among other things: •enter into further resolutions of investigations or enforcement actions •pay additional regulatory penalties or enter into judgments, or •accept material regulatory restrictions on, or changes in the management of, its businesses.


JPM Regulatory

In these circumstances, JPMorgan Chase could also become subject to other sanctions, or to prosecution or civil litigation with respect to the conduct that gave rise to an investigation or enforcement action. In addition, JPMorgan Chase can be subject to higher costs or requests for additional capital in connection with the resolution of governmental investigations and enforcement actions involving newly-acquired businesses, companies in which JPMorgan Chase has made principal investments, parties to joint ventures with JPMorgan Chase, and vendors with which JPMorgan Chase does business.


JPM Regulatory

JPMorgan Chase’s operations and financial results can be negatively impacted in jurisdictions with less predictable legal and regulatory frameworks.


JPM Regulatory

JPMorgan Chase conducts existing and new business in certain countries, states, municipalities, territories and other jurisdictions in which the application of the rule of law is inconsistent or less predictable, including with respect to: •the absence of a statutory or regulatory basis or guidance for engaging in specific types of business or transactions •conflicting or ambiguous laws, rules and regulations, or the inconsistent application or interpretation of existing laws, rules and regulations •uncertainty concerning the enforceability of intellectual property rights or contractual or other obligations •difficulty in competing in economies in which the government controls or protects all or a portion of the local economy or specific businesses, or where graft or corruption may be pervasive •the threat of regulatory investigations, civil litigations or criminal prosecutions that are arbitrary or otherwise contrary to established legal principles in other parts of the world, and •the termination of licenses required to operate in the local market or the suspension of business relationships with governmental bodies.


JPM Regulatory

If the application of the laws, rules and regulations in any jurisdiction is susceptible to producing inconsistent or unexpected outcomes, this can create a more difficult environment in which JPMorgan Chase conducts its business and could negatively affect JPMorgan Chase’s operations and reduce its earnings with respect to that jurisdiction. For example, conducting business could require JPMorgan Chase to devote significant additional resources to understanding, and monitoring changes in, local laws, rules and regulations, as well as structuring its operations to comply with local laws, rules and regulations and implementing and administering related internal policies and procedures.


JPM Regulatory

There can be no assurance that JPMorgan Chase will always be successful in its efforts to fully understand and to conduct its business in compliance with the laws, rules and regulations of all of the jurisdictions in which it operates, and the risk of non-compliance can be greater in jurisdictions that have less predictable legal and regulatory frameworks.


JPM Regulatory

Requirements for the orderly resolution of JPMorgan Chase could result in JPMorgan Chase having to restructure or reorganize its businesses and could increase its funding or operational costs or curtail its businesses.


JPM Regulatory

JPMorgan Chase is required under Federal Reserve and FDIC rules to prepare and submit periodically to those agencies a detailed plan for rapid and orderly resolution in bankruptcy, without extraordinary government support, in the event of material financial distress or failure. The evaluation of JPMorgan Chase’s resolution plan by these agencies may change, and the requirements for resolution plans may be modified from time to time. Any such determinations or modifications could result in JPMorgan Chase needing to make changes to its legal entity structure or to certain internal or external activities, which could increase its funding or operational costs, or hamper its ability to serve clients and customers.


JPM Regulatory

If the Federal Reserve and the FDIC were both to determine that a resolution plan submitted by JPMorgan Chase has deficiencies, they could jointly impose more stringent capital, leverage or liquidity requirements or restrictions on JPMorgan Chase’s growth, activities or operations. The agencies could also require that JPMorgan Chase restructure, reorganize or divest assets or businesses in ways that could materially and adversely affect JPMorgan Chase’s operations and strategy.


JPM Regulatory

Holders of JPMorgan Chase & Co.’s debt and equity securities will absorb losses if it were to enter into a resolution.


JPM Regulatory

Federal Reserve rules require that JPMorgan Chase & Co. (the “Parent Company”) maintain minimum levels of unsecured external long-term debt and other loss-absorbing capacity with specific terms (“eligible LTD”) for purposes of recapitalizing JPMorgan Chase’s operating subsidiaries if the Parent Company were to enter into a resolution either: •in a bankruptcy proceeding under Chapter 11 of the U.S. Bankruptcy Code, or •in a receivership administered by the FDIC under Title II of the Dodd-Frank Act (“Title II”).


JPM Regulatory

If the Parent Company were to enter into a resolution, holders of eligible LTD and other debt and equity securities of the Parent Company will absorb the losses of the Parent Company and its subsidiaries.


JPM Regulatory

The preferred “single point of entry” strategy under JPMorgan Chase’s resolution plan contemplates that only the Parent Company would enter bankruptcy proceedings. JPMorgan Chase’s subsidiaries would be recapitalized, as needed, so that they could continue normal operations or subsequently be divested or wound down in an orderly manner. As a result, the Parent Company’s losses and any losses incurred by its subsidiaries would be imposed first on holders of the Parent Company’s equity securities and thereafter on its unsecured creditors, including holders of eligible LTD and other debt securities. Claims of holders of those securities would have a junior position to the claims of creditors of JPMorgan Chase’s subsidiaries and to the claims of priority (as determined by statute) and secured creditors of the Parent Company.


JPM Regulatory

Accordingly, in a resolution of the Parent Company in bankruptcy, holders of eligible LTD and other debt securities of the Parent Company would realize value only to the extent available to the Parent Company as a shareholder of JPMorgan Chase Bank, N.A. and its other subsidiaries, and only after any claims of priority and secured creditors of the Parent Company have been fully repaid.


JPM Regulatory

The FDIC has similarly indicated that a single point of entry recapitalization model could be a desirable strategy to resolve a systemically important financial institution, such as the Parent Company, under Title II. However, the FDIC


JPM Regulatory

has not formally adopted a single point of entry resolution strategy.


JPM Regulatory

If the Parent Company were to approach, or enter into, a resolution, none of the Parent Company, the Federal Reserve or the FDIC is obligated to follow JPMorgan Chase’s preferred resolution strategy, and losses to holders of eligible LTD and other debt and equity securities of the Parent Company, under whatever strategy is ultimately followed, could be greater than they might have been under JPMorgan Chase’s preferred strategy.


JPM Political

Economic uncertainty or instability caused by political or geopolitical developments can negatively impact JPMorgan Chase’s businesses.


JPM Political

Political developments in the U.S. and other countries can cause uncertainty in the economic environment and market conditions in which JPMorgan Chase operates its businesses. Certain governmental policy initiatives, as well as heightened geopolitical tensions, could significantly affect U.S. and global economic growth and cause higher volatility in the financial markets, including: •an outbreak or escalation of hostilities, or other geopolitical instabilities •monetary policies and actions taken by the Federal Reserve and other central banks or governmental authorities, including any sustained large-scale asset purchases or any suspension or reversal of those actions •fiscal policies, including with respect to taxation and spending •actions that governments take or fail to take in response to the effects of health emergencies, the spread of infectious diseases, epidemics or pandemics, as well as the effectiveness of any actions taken •governmental actions or initiatives relating to climate risk, or more generally, the impact of business activities on environmental, social and governance (“ESG”) matters, and the management of climate and other ESG-related risks •isolationist foreign policies •economic or financial sanctions •the implementation of tariffs and other protectionist trade policies, or •other governmental policies or actions adopted or taken in response to political or social pressures.


JPM Political

These types of political developments, and uncertainty about the possible outcomes of these developments, could: •erode investor confidence in the U.S. economy and financial markets, which could potentially undermine the status of the U.S. dollar as a safe haven currency


JPM Part I

•provoke retaliatory countermeasures by other countries and otherwise heighten tensions in regulatory, enforcement or diplomatic relations •increase concerns about whether the U.S. government will be funded, and its outstanding debt serviced, at any particular time •lead to the withdrawal of government support for agencies and enterprises such as the U.S. Federal National Mortgage Association and the U.S. Federal Home Loan Mortgage Corporation (together, the “U.S. GSEs”) •result in periodic shutdowns of the U.S. government or governments in other countries •increase investor reliance on actions by the Federal Reserve or other central banks, or influence investor perceptions concerning government support of sectors of the economy or the economy as a whole •adversely affect the financial condition or credit ratings of clients and counterparties with which JPMorgan Chase does business, or •cause JPMorgan Chase to refrain from engaging in business opportunities that it might otherwise pursue.


JPM Part I

These factors could lead to: •slower growth rates, rising inflation or recession •greater market volatility •a contraction of available credit and the widening of credit spreads •erosion of adequate risk premium on certain financial assets •diminished investor and consumer confidence •lower investments in a particular country or sector of the economy •large-scale sales of government debt and other debt and equity securities in the U.S. and other countries •reduced commercial activity among trading partners •the potential for a currency redenomination by a particular country •the possible departure of a country from, or the dissolution or formation of, a political or economic alliance or treaty •potential expropriation or nationalization of assets, including client assets, or •other market dislocations, including unfavorable economic conditions that could spread from a particular country or region to other countries or regions.


JPM Part I

Any of these potential outcomes could cause JPMorgan Chase to suffer losses on its market-making positions or in its investment portfolio, reduce its liquidity and capital levels, increase the allowance for credit losses or lead to higher net charge-offs, hamper its ability to deliver


JPM Part I

products and services to its clients and customers, and weaken its results of operations and financial condition or credit rating.


JPM Part I

JPMorgan Chase's business and results of operations may also be adversely affected by actions or initiatives by national, state or local governmental authorities that: •seek to discourage financial institutions from doing business with companies engaged in certain industries, or conversely, to penalize financial institutions that elect not to do business with such companies, or •mandate specific business practices that companies operating in the relevant jurisdiction must adopt.


JPM Part I

Because governmental policies in one jurisdiction may differ or conflict with those in other jurisdictions, JPMorgan Chase may face negative consequences regardless of the course of action it takes or elects not to take, including: •restrictions or prohibitions on doing business within a particular jurisdiction, or with governmental entities in a jurisdiction •the threat of enforcement actions, including under antitrust or other anti-competition laws, rules and regulations, and •harm to its reputation arising from public criticism, including from politicians, activists and other stakeholders.


JPM Part I

JPMorgan Chase has been prohibited from engaging in certain business activities in specific jurisdictions as a result of these types of governmental actions, and there is no assurance that it will not face similar restrictions on its business and operations in the future.


JPM Part I

In addition, JPMorgan Chase's relationships or ability to transact with clients and customers, and with governmental or regulatory bodies in jurisdictions in which JPMorgan Chase does business, could be adversely affected if its decisions with respect to doing business with companies in certain sensitive industries are perceived to harm those companies or to align with particular political viewpoints. Furthermore, JPMorgan Chase's participation in or association with certain environmental and social industry groups or initiatives could be viewed by activists or governmental authorities as boycotting or other discriminatory business behavior.


JPM Market

Economic and market events and conditions can materially affect JPMorgan Chase’s businesses and investment and market-making positions.


JPM Market

JPMorgan Chase’s results of operations can be negatively affected by adverse changes in any of the following: •investor, consumer and business sentiment •events that reduce confidence in the financial markets •inflation, deflation or recession •high unemployment or, conversely, a tightening labor market •the availability and cost of capital, liquidity and credit •levels and volatility of interest rates, credit spreads and market prices for currencies, equities and commodities, as well as the duration of any such changes •the economic effects of an outbreak or escalation of hostilities, terrorism or other geopolitical instabilities, cyber attacks, climate change, natural disasters, severe weather conditions, health emergencies, the spread of infectious diseases, epidemics or pandemics or other extraordinary events beyond JPMorgan Chase’s control, and •the strength of the U.S. and global economies.


JPM Market

All of these are affected by global economic, market and political events and conditions, as well as regulatory restrictions.


JPM Market

In addition, JPMorgan Chase’s investment portfolio and market-making businesses can suffer losses due to unanticipated market events, including: •severe declines in asset values •unexpected credit events •unforeseen events or conditions that may cause previously uncorrelated factors to become correlated (and vice versa) •the inability to effectively hedge risks related to market-making and investment portfolio positions, or •other market risks that may not have been appropriately taken into account in the development, structuring or pricing of a financial instrument.


JPM Market

If JPMorgan Chase experiences significant losses in its investment portfolio or from market-making activities, this could reduce JPMorgan Chase’s profitability and its liquidity and capital levels, and thereby constrain the growth of its businesses.


JPM Market

JPMorgan Chase’s consumer businesses can be negatively affected by adverse economic conditions and governmental policies.


JPM Market

JPMorgan Chase’s consumer businesses are particularly affected by U.S. and global economic conditions, including: •personal and household income distribution •unemployment or underemployment •prolonged periods of exceptionally high or low interest rates •changes in the value of collateral such as residential real estate and vehicles •changes in housing prices •the level of inflation and its effect on prices for goods and services •consumer and small business confidence levels, and •changes in consumer spending or in the level of consumer debt.


JPM Market

Heightened levels of unemployment or underemployment that result in reduced personal and household income could negatively affect consumer credit performance to the extent that consumers are less able to service their debts. In addition, sustained low growth, low or negative interest rates, inflationary pressures or recessionary conditions could diminish customer demand for the products and services offered by JPMorgan Chase’s consumer businesses.


JPM Market

Adverse economic conditions could also lead to an increase in delinquencies, additions to the allowance for credit losses and higher net charge-offs, which can reduce JPMorgan Chase’s earnings. These consequences could be significantly worse in certain geographies, including where declining industrial or manufacturing activity has resulted in or could result in higher levels of unemployment, or where high levels of consumer debt, such as outstanding student loans, could impair the ability of customers to pay their other consumer loan obligations.


JPM Market

JPMorgan Chase’s earnings from its consumer businesses could also be adversely affected by governmental policies and actions that affect consumers, including: •policies and initiatives relating to medical insurance, education, immigration, employment status and housing •laws, rules and regulations relating specifically to the financial services industry, such as limitations on late payment, overdraft and interchange fees, and •policies aimed at the economy more broadly, such as higher taxes and increased regulation which could result in reductions in consumer disposable income.


JPM Market

Unfavorable market and economic conditions can have an adverse effect on JPMorgan Chase’s wholesale businesses.


JPM Market

In JPMorgan Chase’s wholesale businesses, market and economic factors can affect the volume of transactions that JPMorgan Chase executes for its clients or for which it advises clients, and, therefore, the revenue that JPMorgan Chase receives from those transactions. These factors can also influence the willingness of other financial institutions and investors to participate in capital markets transactions that JPMorgan Chase manages, such as loan syndications or securities underwriting. Furthermore, if a significant and sustained deterioration in market conditions were to occur, the profitability of JPMorgan Chase’s businesses engaged in capital markets activities, including loan syndication, securities underwriting and leveraged lending activities, could be reduced to the extent that those businesses: •earn less fee revenue due to lower transaction volumes, including when clients are unwilling or unable to


JPM refinance their outstanding debt obligations in unfavorable market conditions, or

•dispose of portions of credit commitments at a loss, or hold larger residual positions in credit commitments that cannot be sold at favorable prices.


The fees that JPMorgan Chase earns from managing client assets or holding assets under custody for clients could be diminished by declining asset values or other adverse macroeconomic conditions. For example, higher interest rates or a downturn in financial markets could affect the valuation of client assets that JPMorgan Chase manages or holds under custody, which, in turn, could affect JPMorgan Chase’s revenue from fees that are based on the amount of assets under management or custody. Similarly, adverse macroeconomic or market conditions could prompt outflows from JPMorgan Chase funds or accounts, or cause clients to invest in products that generate lower revenue. Substantial and unexpected withdrawals from a JPMorgan Chase fund can also hamper the investment performance of the fund, particularly if the outflows create the need for the fund to dispose of fund assets at disadvantageous times or prices, and could lead to further withdrawals based on the weaker investment performance.


An adverse change in market conditions in particular segments of the economy, such as a sudden and severe downturn in oil and gas prices or an increase in commodity prices, severe declines in commercial real estate values, or sustained changes in consumer behavior that affect specific economic sectors, could have a material adverse effect on clients of JPMorgan Chase whose operations or financial condition are directly or indirectly dependent on the health or stability of those market segments or economic sectors, as well as clients that are engaged in related businesses. JPMorgan Chase could incur credit losses on its loans and other commitments to clients that operate in, or are dependent on, any sector of the economy that is or comes under stress.


An economic downturn or sustained changes in consumer behavior that results in shifts in consumer and business spending could also have a negative impact on certain of JPMorgan Chase’s wholesale clients, and thereby diminish JPMorgan Chase’s earnings from its wholesale operations. For example, the businesses of certain of JPMorgan Chase’s wholesale clients are dependent on consistent streams of rental income from commercial real estate properties, including offices, which are owned or being built by those clients. Sustained adverse economic conditions or hybrid work models could result in reductions in the rental cash flows that owners or developers receive from their tenants which, in turn, could depress the values of the properties, impair the ability of borrowers to service or refinance their commercial real estate loans and lead to an increase in foreclosures. These consequences could result in JPMorgan Chase experiencing increases in the allowance for credit losses, higher delinquencies, defaults and charge-offs within its commercial real estate loan portfolio and


incurring higher costs for servicing a larger volume of delinquent loans in that portfolio. An increase in foreclosures could result in higher operational risk associated with JPMorgan Chase owning and managing real property, and any inadequacy in governance or control over the foreclosed properties could result in regulatory scrutiny and reputational harm.


Changes in interest rates and credit spreads can adversely affect JPMorgan Chase’s earnings, its liquidity or its capital levels.


When interest rates are high or increasing, JPMorgan Chase can generally be expected to earn higher net interest income. However, higher interest rates can also lead to: •fewer originations of commercial and residential real estate loans •losses on underwriting exposures or incremental client-specific downgrades, or increases in the allowance for credit losses and net charge-offs due to higher financing costs for clients •the loss of deposits, particularly if customers withdraw deposits because they believe that interest rates offered by JPMorgan Chase are lower than those of competitors or if JPMorgan Chase makes incorrect assumptions about depositor behavior •losses on available-for-sale (“AFS”) securities held in the investment securities portfolio •lower net interest income if central banks introduce interest rate increases more quickly than anticipated and this results in a misalignment in the pricing of short-term and long-term borrowings •less liquidity in the financial markets, and •higher funding costs.


All of these outcomes could adversely affect JPMorgan Chase’s earnings or its liquidity and capital levels, and any negative outcomes could be more severe in a prolonged period of high interest rates. Higher interest rates can also negatively affect the payment performance on loans within JPMorgan Chase’s consumer and wholesale loan portfolios that are linked to variable interest rates. If borrowers of variable rate loans are unable to afford higher interest payments, those borrowers may reduce or stop making payments, thereby causing JPMorgan Chase to incur losses and increased operational costs related to servicing a higher volume of delinquent loans.


On the other hand, a low or negative interest rate environment may cause: •net interest margins to be compressed, which could reduce the amounts that JPMorgan Chase earns on its investment securities portfolio to the extent that it is unable to reinvest contemporaneously in higher-yielding instruments •unanticipated or adverse changes in depositor behavior, which could negatively affect JPMorgan Chase’s broader asset and liability management strategy, and •a reduction in the value of JPMorgan Chase’s mortgage servicing rights (“MSRs”) asset, decreasing revenues.


When credit spreads widen, it becomes more expensive for JPMorgan Chase to borrow. JPMorgan Chase’s credit spreads may widen or narrow not only in response to events and circumstances that are specific to JPMorgan Chase but also as a result of general economic and geopolitical events and conditions. Changes in JPMorgan Chase’s credit spreads will affect, positively or negatively, JPMorgan Chase’s earnings on certain liabilities, such as derivatives, that are recorded at fair value.


JPMorgan Chase’s results may be materially affected by market fluctuations and significant changes in the value of financial instruments.


The value of securities, derivatives and other financial instruments which JPMorgan Chase owns or in which it makes markets can be materially affected by market fluctuations. Market volatility, illiquid market conditions and other disruptions in the financial markets may make it extremely difficult to value certain financial instruments. Subsequent valuations of financial instruments in future periods, in light of factors then prevailing, may result in significant changes in the value of these instruments. In addition, at the time of any disposition of these financial instruments, the price that JPMorgan Chase ultimately realizes will depend on the demand and liquidity in the market at that time and may be materially lower than their current fair value. Any of these factors could cause a decline in the value of financial instruments that JPMorgan Chase owns or in which it makes markets, which may have an adverse effect on JPMorgan Chase’s results of operations.


JPMorgan Chase’s risk management and monitoring processes, including its stress testing framework, seek to quantify and manage JPMorgan Chase’s exposure to more extreme market moves. However, JPMorgan Chase’s hedging and other risk management strategies may not be effective, and it could incur significant losses, if extreme market events were to occur.


JPM Credit

JPMorgan Chase can be negatively affected by adverse changes in the financial condition of clients, counterparties, custodians and CCPs.


JPM Credit

JPMorgan Chase routinely executes transactions with clients and counterparties such as corporations, financial institutions, asset managers, hedge funds, securities exchanges and government entities within and outside the U.S. Many of these transactions expose JPMorgan Chase to the credit risk of its clients and counterparties, and can involve JPMorgan Chase in disputes and litigation if a client or counterparty defaults. JPMorgan Chase can also be subject to losses or liability where a financial institution that


JPM Credit

it has appointed to provide custodial services for client assets or funds becomes insolvent as a result of fraud or the failure to abide by existing laws and obligations, or where clients are unable to access assets held by JPMorgan Chase as custodian due to governmental actions or other factors.


JPM Credit

A default by, or the financial or operational failure of, a CCP through which JPMorgan Chase executes contracts would require JPMorgan Chase to replace those contracts, thereby increasing its operational costs and potentially resulting in losses. In addition, JPMorgan Chase can be exposed to losses if a member of a CCP in which JPMorgan Chase is also a member defaults on its obligations to the CCP because of requirements that each member of the CCP absorb a portion of those losses. Furthermore, JPMorgan Chase can be subject to bearing its share of non-default losses incurred by a CCP, including losses from custodial, settlement or investment activities or due to cyber or other security breaches.


JPM Credit

As part of its clearing services activities, JPMorgan Chase is exposed to the risk of nonperformance by its clients, which it seeks to mitigate by requiring clients to provide adequate collateral. JPMorgan Chase is also exposed to intra-day credit risk of its clients in connection with providing cash management, clearing, custodial and other transaction services to those clients. If a client for which JPMorgan Chase provides these services becomes bankrupt or insolvent, JPMorgan Chase may incur losses, become involved in disputes and litigation with one or more CCPs, the client’s bankruptcy estate and other creditors, or be subject to regulatory investigations. All of the foregoing events can increase JPMorgan Chase’s operational and litigation costs, and JPMorgan Chase may suffer losses to the extent that any collateral that it has received is insufficient to cover those losses.


JPM Credit

Transactions with government entities, including national, state, provincial, municipal and local authorities, can expose JPMorgan Chase to enhanced sovereign, credit, operational and reputation risks. Government entities may, among other things, claim that actions taken by government officials were beyond the legal authority of those officials or repudiate transactions authorized by a previous incumbent government. These types of actions have in the past caused, and could in the future cause, JPMorgan Chase to suffer losses or hamper its ability to conduct business in the relevant jurisdiction.


JPM Credit

In addition, local laws, rules and regulations could limit JPMorgan Chase’s ability to resolve disputes and litigation in the event of a counterparty default or unwillingness to make previously agreed-upon payments, which could subject JPMorgan Chase to losses.


JPM Credit

Disputes may arise with counterparties to derivatives contracts with regard to the terms, the settlement procedures or the value of underlying collateral. The disposition of those disputes could cause JPMorgan Chase to incur unexpected transaction, operational and legal costs, or result in credit losses. These consequences can


JPM Part I

also impair JPMorgan Chase’s ability to effectively manage its credit risk exposure from its market activities, or cause harm to JPMorgan Chase’s reputation.


JPM Part I

The financial or operational failure of a significant market participant, such as a major financial institution or a CCP, or concerns about the creditworthiness of such a market participant or its ability to fulfill its obligations, can cause substantial and cascading disruption within the financial markets, including in circumstances where coordinated action by multiple other market participants is required to address the failure or disruption. JPMorgan Chase’s businesses could be significantly disrupted by such an event, particularly if it leads to other market participants incurring significant losses, experiencing liquidity issues or defaulting, and JPMorgan Chase is likely to have significant interrelationships with, and credit exposure to, such a significant market participant.


JPM Part I

JPMorgan Chase may suffer losses if the value of collateral declines in stressed market conditions.


JPM Part I

During periods of market stress or illiquidity, JPMorgan Chase’s credit risk may be further increased when: •JPMorgan Chase fails to realize the estimated value of the collateral it holds •collateral is liquidated at prices that are not sufficient to recover the full amount owed to it, or •counterparties are unable to post collateral, whether for operational or other reasons.


JPM Part I

Furthermore, disputes with counterparties concerning the valuation of collateral may increase in times of significant market stress, volatility or illiquidity, and JPMorgan Chase could suffer losses during these periods if it is unable to realize the fair value of collateral or to manage declines in the value of collateral.


JPM Part I

JPMorgan Chase could incur significant losses arising from concentrations of credit and market risk.


JPM Part I

JPMorgan Chase is exposed to greater credit and market risk to the extent that groupings of its clients or counterparties, or obligors on securities and other financial instruments: •engage in similar or related businesses, or in businesses in related industries •do business in the same geographic region, or •have business profiles, models or strategies that could cause their ability to meet their obligations to be similarly affected by changes in economic conditions.


JPM Part I

For example, a significant deterioration in the credit quality of a counterparty, borrower or other obligor could lead to concerns about the creditworthiness of other counterparties, borrowers or obligors in similar, related or dependent industries. This type of interrelationship could exacerbate JPMorgan Chase’s credit, liquidity and market risk exposure and potentially cause it to incur losses,


JPM Part I

including fair value losses in its market-making businesses and investment portfolios. In addition, JPMorgan Chase may be required to increase the allowance for credit losses or establish other reserves with respect to certain clients, industries or country exposures in order to align with directives or expectations of its banking regulators.


JPM Part I

Similarly, challenging economic conditions that affect a particular industry or geographic area could lead to concerns about the credit quality of counterparties, borrowers or other obligors not only in that particular industry or geography but in related or dependent industries, wherever located. These conditions could also heighten concerns about the ability of customers of JPMorgan Chase’s consumer businesses who live in those areas or work in those affected industries or related or dependent industries to meet their obligations to JPMorgan Chase. JPMorgan Chase regularly monitors various segments of its credit and market risk exposures to assess the potential risks of concentration or contagion, but its ability to diversify or hedge its exposure against those risks may be limited.


JPM Part I

JPMorgan Chase’s consumer businesses can also be harmed by an excessive expansion of consumer credit by bank or non-bank competitors. Heightened competition for certain types of consumer loans could prompt industry-wide reactions such as significant reductions in the pricing or margins of those loans or the making of loans to less-creditworthy borrowers. If large numbers of consumers subsequently default on their loans, whether due to weak credit profiles, an economic downturn or other factors, this could impair their ability to repay obligations owed to JPMorgan Chase and result in higher charge-offs and other credit-related losses. More broadly, widespread defaults on consumer debt could lead to recessionary conditions in the U.S. economy, and JPMorgan Chase’s consumer businesses may earn lower revenues in such an environment.


JPM Part I

If JPMorgan Chase is unable to reduce positions effectively during a market dislocation, this can increase both the market and credit risks associated with those positions and the level of risk-weighted-assets (“RWA”) that JPMorgan Chase holds on its balance sheet. These factors could adversely affect JPMorgan Chase’s capital position, funding costs and the profitability of its businesses.


JPM Liquidity

JPMorgan Chase’s ability to operate its businesses could be impaired if its liquidity is constrained.


JPM Liquidity

JPMorgan Chase’s liquidity can be impacted at any given time as a result of factors such as: •market-wide illiquidity or disruption •changes in liquidity or capital requirements resulting from changes in laws, rules and regulations, including those in response to economic effects of systemic events •actions taken by the U.S. government or by the Federal Reserve to reduce its balance sheet, which may reduce


JPM deposits held by JPMorgan Chase and other financial institutions

•inability to sell assets, or to sell assets at favorable times or prices •default by a CCP or other significant market participant •unanticipated outflows of cash or collateral •unexpected loss of deposits or higher than anticipated draws on lending-related commitments, and •lack of market or customer confidence in JPMorgan Chase or financial institutions in general.


A reduction in JPMorgan Chase’s liquidity may be caused by events over which it has little or no control. For example, periods of market stress, low investor confidence and significant market illiquidity could result in higher funding costs for JPMorgan Chase and could limit its access to some of its traditional sources of liquidity.


JPMorgan Chase may need to raise funding from alternative sources if its access to stable and lower-cost sources of funding, such as deposits and borrowings from Federal Home Loan Banks, is reduced. Alternative sources of funding could be more expensive or limited in availability. JPMorgan Chase’s funding costs could also be negatively affected by actions that JPMorgan Chase may take in order to: •satisfy applicable liquidity coverage ratio and net stable funding ratio requirements •address obligations under its resolution plan, or •satisfy regulatory requirements in jurisdictions outside the U.S. relating to the pre-positioning of liquidity in subsidiaries that are material legal entities.


More generally, if JPMorgan Chase fails to effectively manage its liquidity, this could constrain its ability to fund or invest in its businesses and subsidiaries, and thereby adversely affect its results of operations.


JPMorgan Chase & Co. is a holding company and depends on the cash flows of its subsidiaries to make payments on its outstanding securities.


JPMorgan Chase & Co. is a holding company that holds the stock of JPMorgan Chase Bank, N.A. and an intermediate holding company, JPMorgan Chase Holdings LLC (the “IHC”). The IHC in turn generally holds the stock of JPMorgan Chase’s subsidiaries other than JPMorgan Chase Bank, N.A. and its subsidiaries. The IHC also owns other assets and provides intercompany lending to the Parent Company.