A US bank has admitted to its customers that it has made a mistake when calculating the value of its assets that were unclaimed and have not been recovered.
The New York Federal Reserve, the world’s largest bank by assets, said it had made the errors while it was trying to determine whether to add $6.2bn to a portfolio of $15.3bn.
The bank, the largest US financial institution, has been in financial turmoil for months after its chief executive, Jamie Dimon, lost his job amid a corruption scandal.
It said the errors, which were made during the period in question, had impacted about 2,200 customers.
“In our view, the errors in the asset-for-value determination were made in error,” the bank said in a statement on Monday.
“This was the result of a mistake made in the initial assessment of the assets that we were considering for inclusion in the fixed asset definition.”
The bank said it was making “a public apology to customers who may have been affected by this error”.
It added that the errors were “a reflection of the complexities and nuances of asset-based valuation”.
The bank is part of the US government, which is under pressure to get its finances in order after the global financial crisis.
It has been under pressure for months to come up with a new definition for assets it says it cannot recover from customers who are not eligible for financial assistance.
The US Justice Department, which has launched a criminal investigation into the bank’s handling of the crisis, is also investigating the bank over its handling of customer claims.
In a statement, the bank added: “As a result of this error, we are removing assets from our fixed asset inventory and are working with the relevant authorities to review the assessment of assets in this inventory.”
We will also continue to work with regulators to ensure that our process is accurate and transparent.
“As a reminder, we continue to review our asset-by-asset assessment processes and will make changes as necessary.”‘
No-one else was affected’JPMorgan is the largest bank in the US and the second largest in the world, with about $2.3tn of assets under management.
It was the first major US bank to admit to a mistake in its asset-value assessment in September, and its admission followed months of public outcry over the bank.
The news came just hours after the head of the UK’s Financial Conduct Authority, Chris Patten, said that the UK was likely to find the bank liable for the £3.9bn it had allegedly lost on its trading of derivatives.
He said that regulators had now begun looking at whether JP Morgan should have made similar mistakes.
The audit team found no evidence that the bank has been unable to recover the lost money, and the bank agreed to make significant progress on these matters over the coming weeks.””
That was the conclusion reached by our independent audit team when we asked the bank for details on the nature of the errors and why the bank made them.”
The audit team found no evidence that the bank has been unable to recover the lost money, and the bank agreed to make significant progress on these matters over the coming weeks.
“Given that the findings are not yet final, we believe that the appropriate corrective actions are now in place.”
The new rules were introduced in May.
The BBC’s Chris Morris in London said that a spokeswoman for the bank was unavailable for comment.
The regulator has been investigating whether JPM’s asset-to-assets assessment was not correct in June, and a report is due to be published later this month.
The statement from JP Morgan said that in response to an inquiry by the FCA, it had “implemented additional measures to reduce risk in its assessment of our asset portfolio”.
The company said that it was working to fix the errors that had occurred and had been working with regulators and lawyers to assess its next steps.”JPMC has committed to improving the process and the way it assesses its assets and we are confident that we can achieve this while maintaining high standards of integrity and honesty,” the statement added.