The European Central Bank (ECB) fined JP Morgan on Thursday the heaviest penalty in its history, amounting to €12.2 million, for transmission of erroneous data on its capital needs.
This measure targets the European subsidiary of the American bank, accused of gross negligence in calculating its risk-weighted assets (RWA), a key indicator for assessing its financial strength.
Between 2019 and 2024, JP Morgan understated these RWAs by incorrectly classifying certain corporate loans for fifteen consecutive quarters. This error distorted the bank’s capital ratios, giving a misleading picture of its ability to absorb losses on its loans or investments.
Repeated breaches of prudential rules
The ECB reproaches the bank for two distinct infringements, each punished separately by fines of €10 million and €2 million. JP Morgan also illegally excluded certain transactions from the calculation of another key indicator for twenty-one quarters, depriving the supervisor of an accurate view of its overall risk profile.
This case surpasses the previous fine of €10.4 million imposed in December 2024 on BNP Paribas Fortis for similar facts. JP Morgan, the leading U.S. bank by assets, is challenging this decision before the Court of Justice of the European Union.
Supervision context
This sanction sits within a series of measures tightened by the ECB against the major banks in the euro area. On Friday, Crédit Agricole was fined €7.55 million for delays in providing information on climate and environmental risks.
In November last year, the German regulator had already fined JP Morgan €45 million for weaknesses in anti-money laundering controls. These actions highlight the demand for greater transparency in a banking sector under constant regulatory pressure.
The ECB reaffirmed its role as an uncompromising supervisor in the face of reporting errors. JP Morgan is paying a heavy price for these prolonged lapses, strengthening the credibility of European prudential controls. Banks under supervision must now redouble their vigilance over their risk disclosures.
