JPMorgan Chase & (JPM) risk factors, 2026 10-K

Other

1. 01credit risk with respect to clients, customers, counterparties and other market participants
2. 02of local economic, political, regulatory and social factors on JPMorganChase’s business in certain countries in which it operates
3. 03The above summary is subject in its entirety to the discussion of the risk factors set forth below
4. 04“applicable law” means the laws, rules and regulations that apply to JPMorganChase’s businesses in the jurisdictions in which it operates
5. 05JPMorganChase’s businesses are highly regulated and are significantly affected by applicable law and supervisory expectations
6. 06Differences in the supervision and regulation of financial services firms could require JPMorganChase to modify its operations and incur higher operational and compliance costs
7. 07JPMorganChase faces significant legal risks from civil and governmental proceedings, including litigation, investigations and enforcement actions
8. 08Resolving an investigation by a governmental authority could subject JPMorganChase to significant penalties and other repercussions
9. 09JPMorganChase’s compliance risk and operating costs could be higher in jurisdictions with less predictable legal, regulatory and judicial frameworks
10. 10JPMorganChase's business and operations could be negatively affected by governmental policies that discourage or penalize doing business with certain industries or that require specific business practices
11. 11Changes in the requirements for the regulatory evaluation of JPMorganChase’s resolution plan could increase its funding or operational costs or require restructuring or curtailment of its businesses
12. 12Any such changes could result in JPMorganChase making changes to its legal entity structure or to certain of its internal or external activities, which could increase its funding or operational costs, or hamper its ability to serve clients and customers
13. 13Holders of JPMorgan Chase & Co.’s debt and equity securities will absorb losses if it were to enter into a resolution
14. 14The FDIC has similarly indicated that a single point of entry recapitalization model would be its expected strategy to resolve a systemically important financial institution, such as the Parent Company, under Title II. However, the FDIC has not formally adopted or committed to any specific resolution strategy
15. 15JPMorganChase’s businesses could be negatively affected by economic uncertainty resulting from political and geopolitical developments
16. 16These risks could become highly correlated or combine in unexpected ways under certain circumstances, including geopolitically challenging situations in regions such as Russia, the Middle East and China
17. 17Adverse economic and market events and conditions could negatively affect JPMorganChase’s results of operations and investment and market-making positions
18. 18commodities, and the duration of any such changes, and
19. 19The above factors could be affected by global economic, market and political events and conditions, including the regulatory environment, monetary policies, trade policies, and actions taken by central banks or governmental authorities
20. 20JPMorganChase’s consumer businesses could be negatively affected by adverse economic conditions and adverse impacts of governmental policies
21. 21Unfavorable market and economic conditions could adversely affect JPMorganChase’s wholesale businesses
22. 22prices, and could lead to further withdrawals based on the weaker investment performance
23. 23Changes in interest rates and credit spreads could adversely affect JPMorganChase’s earnings or its liquidity and capital levels
24. 24All of these outcomes could adversely affect JPMorganChase’s earnings or its liquidity and capital levels, with more severe impacts in a prolonged period of high interest rates
25. 25When credit spreads widen, it becomes more expensive for JPMorganChase to borrow
26. 26JPMorganChase’s results could be materially affected by market fluctuations and significant changes in the valuation of financial instruments
27. 27JPMorganChase could be negatively affected by adverse changes in the financial condition of clients, counterparties, CCPs and other market participants
28. 28All of the foregoing events could increase JPMorganChase’s operational and litigation costs, and JPMorganChase could suffer losses to the extent that the realized value of any collateral that it has received is insufficient to cover those losses
29. 29JPMorganChase could suffer losses if the value of collateral declines
30. 30JPMorganChase could incur significant losses arising from concentrations of credit and market risk
31. 31More broadly, widespread defaults on consumer debt could lead to recessionary conditions in the U.S. economy, and JPMorganChase’s consumer businesses could earn lower revenues in such an environment
32. 32JPMorganChase’s ability to operate its businesses could be impaired if its liquidity is constrained
33. 33limited during periods of market stress, low investor confidence or significant market illiquidity
34. 34JPMorgan Chase & Co. is a holding company and depends on its subsidiaries for funding to make payments on its outstanding securities
35. 35JPMorganChase’s liquidity and cost of funding could be adversely affected by downgrades in its credit ratings
36. 36JPMorganChase has experienced credit ratings downgrades in the past, and there is no assurance that JPMorganChase’s credit ratings will not be downgraded in the future. Furthermore, any such downgrade could occur at a time of broader market instability, limiting JPMorganChase’s options for responding
37. 37JPMorganChase’s ability to distribute capital to shareholders, and to support its business activities could be limited if it does not satisfy applicable regulatory capital requirements
38. 38Although more likely in times of stress, JPMorganChase may use its regulatory capital buffers allowing capital ratios to decline below regulatory requirements, subjecting it to restrictions on capital distributions and discretionary bonus payments to its executive officers
39. 39JPMorganChase’s businesses could be adversely affected by the failure or disruption of operational systems on which they depend
40. 40There can be no assurance that these and other types of operational failures or disruptions will not occur in the future
41. 41JPMorganChase’s interconnectedness with clients, customers and other external parties could be a source of significant operational risk
42. 42A successful cyber attack could cause significant harm to JPMorganChase and its clients and customers
43. 43JPMorganChase or its clients, customers, counterparties or employees
44. 44JPMorganChase has experienced security breaches due to cyber attacks in the past, and future breaches are inevitable. Any such breach could result in serious and harmful consequences for JPMorganChase or its clients and customers
45. 45including cryptographic protections, potentially exposing data
46. 46Furthermore, a third-party could misappropriate confidential information obtained by intercepting signals or communications from mobile devices used by JPMorganChase’s employees
47. 47JPMorganChase’s businesses could be adversely affected if it fails to identify and address operational risks associated with the introduction of or changes to products, services, delivery platforms or technologies
48. 48JPMorganChase faces substantial legal and operational risks related to the processing and safeguarding of personal information
49. 49JPMorganChase’s operations, results and reputation could be harmed by occurrences of extraordinary events beyond its control
50. 50JPMorganChase does business, to comply with applicable law
51. 51Any failure to maintain adequate data management processes could adversely affect JPMorganChase’s ability to effectively manage its businesses, comply with applicable law or make informed business decisions
52. 52Any of these deficiencies could impair JPMorganChase’s ability to make sound business decisions, cause it to incur higher operational and compliance costs, result in operational breakdowns or failure to meet regulatory requirements, negatively affect clients and customers, or cause reputational harm
53. 53Enhanced regulatory and other standards for the oversight of JPMorganChase’s vendors and other service providers could result in higher costs and other potential exposures
54. 54JPMorganChase could incur losses arising from any significant inadequacy or lapse in its risk management framework and control environment
55. 55from the historical environments upon which the models were developed. Any heightened uncertainty associated with these estimates may necessitate a greater degree of judgment and analytics to inform any adjustments that JPMorganChase may make to model outputs
56. 56A significant inadequacy in disclosure or financial reporting controls could negatively affect JPMorganChase’s business, operations and reputation
57. 57JPMorganChase’s results or competitive standing could suffer if its management fails to develop and execute effective business strategies and to anticipate changes affecting those strategies
58. 58Competition in the financial services industry could lead to negative effects on JPMorganChase’s results of operations
59. 59JPMorganChase’s operations, results, and competitive standing could be adversely affected by the development of advanced technologies such as AI
60. 60The effects of climate change could adversely affect JPMorganChase’s business and operations, both directly and as a result of impacts on its clients and customers
61. 61Conduct failure by JPMorganChase employees could trigger litigation and regulatory actions and harm JPMorganChase’s reputation
62. 62Damage to JPMorganChase’s reputation could negatively affect its business, results and prospects
63. 63Failure to effectively manage potential conflicts of interest or to satisfy fiduciary obligations could result in litigation and enforcement actions and cause reputational harm
64. 64An outbreak or escalation of hostilities between countries or within a country or region could have a material adverse effect on the global economy and on JPMorganChase’s businesses within the affected region or globally
65. 65JPMorganChase’s business and operations in certain countries could be adversely affected by local economic, political, regulatory and social factors
66. 66Various factors could impact JPMorganChase’s workforce