Monday, January 26, 2015

J.P. Morgan Chase: Worth Less Than The Sum Of Its Parts?

As one of the “megabanks” created in the wake of the 2008 global financial crisis, are J.P. Morgan Chase and its ilk truly worth less than the sum of its parts?

By: Ringo Bones 
Even though it made over 4 billion US dollars during the last three months, J.P. Morgan Chase and related “megabanks” that were created during the wake of the 2008 global financial crisis had been recently criticized by leading economic pundits as being “worth less than the sum of its parts”. Worse still, some “economic schools” criticize such global megabanks as “too big to outperform competing banks now nipping at their heels”. In short, the world’s leading economists seem to have reached a consensus that these global megabanks – unless broken up soon – are just too big to succeed. 

While risk-averse politicians like U.S. Democratic Party Senator Elizabeth Warren even recommends that global megabanks and their ilk need to be broken up soon because they threaten the U.S. economy. Whatever your political leanings may be, it is quite hard to ignore the fact that shareholders of these global megabanks are now complaining because their investments in these banks are not earning enough to their own personal satisfaction. Maybe it is now safe to wonder if these global megabanks actually used the U.S. government’s bailout money wisely. 

1 comment:

May Anne said...

Does existing American anti-trust laws apply to financial institutions that are "too big to fail" or "too big to succeed" like J.P. Morgan Chase & Co.?