JPMorgan Chase & Co. is the bank most integral to the stability of the global financial system, followed by HSBC Holdings Plc and Citigroup Inc., according to a U.S. study.
U.S.-based banks account for half of the 10 lenders that ranked highest for “systemic importance” in the report released Tuesday by the Office of Financial Research. Bank of America Corp., Morgan Stanley and Goldman Sachs Group Inc. were also in the top 10.
The researchers evaluated factors that global regulators use to assess systemic importance, including size, complexity and how difficult the bank would be to replace if it were to fail. U.S. banks “particularly dominate the complexity and substitutability categories,” according to the report, written by the OFR’s Paul Glasserman and Bert Loudis.
Banks based outside of the U.S. that were in the top 10 include Deutsche Bank AG, BNP Paribas SA, Barclays Plc and Credit Suisse Group AG.
The report said exchange-rate fluctuations could impact the rankings, and is a potential weakness in the criteria used by the Basel Committee on Banking Supervision, a group of international regulators. Banks might be encouraged to “adjust their business near the end of the year solely to offset currency effects,” the researchers said.
JPMorgan was also first in a ranking of just U.S. banks that the research office released in February. The OFR conducts studies for U.S. regulators and the Financial Stability Oversight Council.
JPMorgan, the biggest U.S. bank by assets, has a shortfall of as much as $12.5 billion to meet capital rules approved by the Federal Reserve last month. The New York-based lender was assigned the highest capital surcharge of the eight large U.S. banks that must comply with the new Fed rule.