Bank on It! Did Your Institution Make the Risky Bank List?

Bank on It! Did Your Institution Make the Risky Bank List?

You might not know what a bank’s “systemic risk score” is, but trust us—you should.

The term refers to the potential danger that the bank would pose to the international financial system if it were to fail.

And according to a new report by a U.S. government agency, the institution with the highest score is J.P. Morgan Chase & Co.


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The report, by the Office of Financial Research, found that J.P. Morgan had a systemic risk score of 5.05% in 2013. That score places it at the top of 33 U.S. bank holding companies with assets over $250 billion.

The scores reflect factors such as size and substitutability—i.e. how hard it would be for consumers to find a similar institution to replace the bank’s services. J.P. Morgan scored high not only on size, but also on categories like their over-the-counter derivatives (which ranked high on the "complexity" factor).

Just below J.P. Morgan were Citigroup Inc., which scored 4.27% and Bank of America Corp., which scored 3.06%. Morgan Stanley and Goldman Sachs Group, Inc. were next.

The Office of Financial Research, a unit of the Treasury, was established in 2010 to help measure risk in the financial sector—and help prevent another economic crisis. This analysis is the first of its kind.

Of course, there are other options for your personal banking needs aside from these big-name institutions. Check out the nine top-rated virtual banks here.


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