JPMorgan Chase & Co (NYSE:JPM) has announced that it is to pull back on dealings with foreign banks in order to reduce risk at the investment house. The Wall Street Journal reported the news earlier on Friday. The piece on the decision was based on a JPMorgan internal memo about the risk reducing rules.
The internal memo said that JPMorgan Chase & Co (NYSE:JPM) would reexamine the relationship it had with thousands of foreign banks that it clears payments for. The investment bank also helps those banks process many other kinds of payments. The investment bank is also planning to reallocate some more resources toward compliance.
JPMorgan Chase & Co (NYSE:JPM) is in the cross hairs of multiple regulatory bodies at the moment after several missteps in recent years have highlighted it as a risky bettor. The London Whale scandal was the most important example of the company’s public image problem, but there have been other moves that brought the bank up in front of regulators.
Today’s move can be seen as part of a broad range of changes that JPMorgan Chase & Co (NYSE:JPM) has been talking about and making to its corporate culture, particularly in the compliance and risk reduction field. The bank was one of the group that was not up to scratch in the most recent check up on Federal Reserve stress tests. Those tests specifically highlighted risk and information management as problem areas at several major banks.
JPMorgan succumbs to pressure
JPMorgan Chase & Co (NYSE:JPM) is trying to get back on the good side of the regulators. The company is reducing its exposure to foreign banks and reallocating some resources to compliance. Corporate culture appears to be changing at the bank, and though its less of a change that some might like, the firm may be moving in the right direction, reducing risk and improving compliance.