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JPMORGAN CHASE has made a blow to the efforts of regulators to understand the depth of the links between banks, buyout companies and the rapidly growing private credit sector, refusing to disclose its loans in a field of increasing systemic concern.
American banking regulators have imposed a deadline of February 4 so that lenders disclose their end -of -year exposure to different types of “non -banking financial institutions” on a “best effects” basis. Banks have until the end of the second quarter to be fully in line.
Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo provided breakdowns of their loans, providing a window on the extent of the general public banks with an increasing but always opaque part of the financial system.
But the largest bank in the United States has qualified the $ 133 billion in its loans to non-banks as “other” in its quarterly report filed with the Federal Deposit Insurance Corporation rather than decomposing it by type of borrower . This sum is more than the total loans of all, except a handful of the largest banks in the country.
A person familiar with JPMorgan’s decision said that the bank thought that there was an “operational risk” in the declaration of its loan categories in a way at the FDIC and another at the Federal Reserve, which has Glued with the declaration requirements and previous directives to disclose non-skilful loans. The FDIC refused to comment.
The regulators have requested more information on the exposure of banks to non -banking financial institutions as the sector has increased and the larger system of systemic risk has increased.
Loans to non -banking lenders totaled nearly 1.2 TN at the end of 2024, putting them on equal mortgage loans to commercial real estate developers and consumer credit card loans, according to an analysis of FDIC data by the BankregData aggregator.
“Non-skates have become among the most important and potentially risky borrowers of major American banks,” said Viral Achaya of the Stern School of Business at New York University. “Right now, the only one to have an image of the amount of risk that it is, it is the Fed and only banks that it stressed.”
Banque loans to “non-depository financial companies” increased from just over 50 billion dollars in 2010, according to data from the United States Fed. This month, the Central Bank said it would introduce an analysis of non-banking financial institutions and the risks that they may have at the largest banks in the country as part of this year’s stress tests.
Direct lenders and private credit funds often lend to companies that are themselves more for profit and can find it difficult to borrow from traditional banks. Borrowing part of the money to make these loans can increase the yields of their investors, but this also increases the risk for the financial system.
Even with the exclusion of JPMorgan of FDIC data, new disclosure show how private credit and capital-investment funds have become large borrowers from traditional banks. US banks have declared $ 214 billion in ongoing loans to credit funds and other direct commercial lenders and $ 200 more to investment capital funds, according to data.
Business loans of the investment capital orbit will be even higher because the figures do not include loans to portfolio companies.
Wells Fargo alone said $ 91 billion in private credit companies and investment capital funds at the end of 2024 in its FDIC deposits. It was more than any other bank, and more than 10% of its $ 887 billion in global loans at the end of last year.
“We continue to think that this is a limited risk for banks in terms of financial stability,” said Julie Solar, analyst at Fitch Ratings. “But as private credit continues to grow and evolve, you have the question of how banks manage this risk.”
