European Banking Authority Hits JPMorgan with $14.3 Million Fine

JPMorgan's European division will pay 12.18 million euros in penalties for incorrectly reporting capital requirements to regulators. The European Central Bank says the bank underreported risk-weighted assets for nearly five years by misclassifying corporate exposures.

FRANKFURT – JPMorgan’s European division faces a substantial financial penalty after banking regulators discovered years of incorrect capital reporting, officials announced Thursday.

The European Central Bank imposed a 12.18 million euro fine (equivalent to $14.32 million) on the American banking giant’s European operations for improperly calculating and reporting their capital requirements over an extended period.

According to the ECB’s findings, the violations spanned from 2019 through 2024, during which JPMorgan consistently underreported the risk levels of certain assets on their books.

“Between 2019 and 2024, the bank reported lower risk-weighted assets than it should have done,” the ECB said. “This occurred because, for 15 consecutive quarters, the bank misclassified corporate exposures and applied a lower risk-weight for credit risk to them than what banking rules prescribe.”

Banking officials also determined that JPMorgan inappropriately left out specific transactions when computing their risk-weighted assets, further compounding the reporting errors.

The financial institution has the option to appeal this regulatory decision through the Court of Justice of the European Union.

In response to the penalty, JPMorgan accepted responsibility for the violations and confirmed they have addressed the underlying problems.

“J.P. Morgan SE proactively identified and self-reported the issues, which have now been fully remediated,” a spokesperson said in a statement.

“JPMSE has consistently maintained strong capital buffers, and our robust, prudent approach to capitalization remains unchanged.”

The penalty represents the latest enforcement action by European banking authorities as they continue monitoring compliance with post-financial crisis regulations designed to ensure banks maintain adequate capital reserves.