JPMorgan Chase, Bank of America, and Citibank are under scrutiny for holding trillions of dollars in unknown and potentially risky assets off their balance sheets, according to new data from the US government. The Federal Financial Institutions Examination Council (FFIEC) revealed that JPMorgan Chase holds $3.227 trillion off-balance sheet, Bank of America holds $1.6 trillion off-balance sheet, and Citibank holds $2.6 trillion off-balance sheet.
Off-balance sheet activities, as defined by the Federal Reserve, include a variety of financial instruments such as firm loan commitments, standby letters of credit, and derivative products. This practice has been common in the banking industry for years and played a significant role in the 2008 financial crisis.
In response to the potential risks posed by off-balance sheet assets, the Federal Reserve proposed higher capital requirements for banks last year. However, CEOs from major banks, including JPMorgan Chase, Wells Fargo, and Citigroup, argued against these changes, claiming they would harm the banking industry and the economy.
JPMorgan Chase CEO Jamie Dimon expressed concerns that the proposed regulations would limit banks’ ability to deploy capital when needed most and have a negative impact on the economy, markets, and American households.
The revelation of these off-balance sheet assets raises questions about the transparency and stability of the banking industry. Investors are advised to do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency, or digital assets. The Daily Hodl will continue to monitor this developing story.
