The European Central Bank has imposed two fines totaling 12.2 million euros on the European branch of the American bank J.P. Morgan. The institution accuses the financial giant of gross negligence in reporting capital requirements. For five years, the bank underreported the value of risk-weighted assets, preventing the supervisor from making a reliable assessment of the entity's financial health. This is the highest monetary sanction in the history of banking supervision conducted by the Frankfurt-based institution.
Record monetary fine
The European Central Bank imposed a 12.2 million euro fine on J.P. Morgan, which is the highest sanction in the supervisory history of this institution.
Bank's gross negligence
The supervisor accuses the bank of gross negligence in calculating risk-weighted assets in the period from 2019 to 2024.
Incorrect capital data
For 15 quarters, the bank submitted underreported data, preventing the ECB from correctly assessing the institution's solvency and financial safety.
The banking supervision arm of the European Central Bank has taken the unprecedented decision to penalize J.P. Morgan SE, the European arm of the American financial powerhouse. According to an official statement, the bank has been ordered to pay 12.18 million euros (approximately 14.3 million dollars) due to years of neglect in reporting key financial data. The irregularities concerned the incorrect calculation of risk-weighted assets (RWA), which form the foundation for assessing a bank's stability. Following the 2008 financial crisis, regulatory bodies worldwide introduced stringent capital requirements (Basel III) to prevent another banking system collapse and the need to bail out private institutions with taxpayer money.The investigation revealed that between 2019 and 2024, J.P. Morgan submitted underreported data about its risk profile for 15 consecutive quarters. The ECB qualified this action as "gross negligence". These errors resulted from the improper application of mathematical models and a lack of adequate internal control systems. „"The bank declared risk-weighted assets lower than it should have, which prevented us from obtaining a full picture of its risk profile."” — ECB Statement This is the second such incident in a short time where the American bank has come into conflict with supervisory authorities, casting a shadow on its operational procedures in Europe. Although the 12.2 million euro amount is a record for the ECB, experts note that compared to the bank's annual profits, it is symbolic and disciplinary in nature. However, this decision is a signal to the entire financial sector that the Single Supervisory Mechanism will not tolerate shortcomings in the transparency of capital reporting. 12.2 million € — highest fine in ECB supervision history ECB Sanctions for Reporting Errors: : → ; : →
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