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Posted on 02/24/2016 6:09:07 PM PST by Lorianne
J.P. Morgan Chase CEO Jamie Dimon is focused on building a so-called fortress balance sheet at his behemoth bank. To that end, he said the bank JPM, +0.04% has added around $500 million to its reserves against loans losses in the oil-and-gas sector in the first quarter of 2016.
The move comes as crude-oil prices have fallen about 12% so far this year and have plunged 34% over the past 12 months, putting the finances of energy companies under pressure.
Offering details about its balance sheet at an event for investors in New York on Tuesday, the sprawling bank said if crude prices tumble to around $25 a barrel and remain there for 1½ years, it may add an additional $1.5 billion to its reserve balance. The U.S. benchmark for oil, West Texas Intermediate CLJ6, -0.47% currently trades around $32.
(Excerpt) Read more at marketwatch.com ...
Oops! the boss screwed up! Time to pay the piper, buddy.
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The big banks need loan loss reserves of 3percent as a standard and a debt/equity of no more than 8percent. They need liquidity and equity for market resilience.
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