Question

Question 1 Leverage in the financial system JPMorgan Chase & Co. 2018 Liabilities 22,324 Total Deposits 1.377.582 Demand Deposits 413,714 Savings/Time Deposits 32158 Foreign Office Deposits 56,059 Total Debt 42547 ST Debt Current Portion LT Debt 137.127 Long-Term Debt 138,090 Other Liabilities 268 457 1.470,666 369 SOS 33105 270,076 553,868 290.50 262,920 341.483 * All values USD Millions Assets Total Cash & Due from Banks Investments - Total Trading Account Securities Federal Funds Sold & Securities Purchased Treasury Securities State Municipal Securities Mortgace Backed Securities Other Securities Other investments Net Loans Commercial & Industrial Loans Consumer installment Loans Real Estate Mortgage Loans Loan Loss Allowances Reserves Real Estate Other Than Bank Premises Net Property. Plant & Equipment Other Assets including intangibles Other Assets Intangible Assets Interest Receivables Total Assets 442,313 292,540 237,13 13.45 14,934 175.131 Total Liabities 126912 48.219 Total Equity 7200 Leverage (1) Compute the total assets, total liabilities, equity, and leverage. (2) For each $100 of assets, how much is finaced with equity and how much with debt? (3) By what percentage would assets have to decline in value to bankrupt JPMorgan Chase & Co.?

Answer 1

1)  

Total Assets	26,22,532
Total Liabilities	23,66,017
Leverage	9.22

Assets		Liabilities
Total cash & Due from Bank	22,324	Total Deposits	14,70,666
Investments - Total	13,77,582	Total Debt	5,53,868
Net Loans	9,59,121	Other Liabilities	3,41,483
Real Estate Other than bank premises	240
Net Propert, Plant & Equipment	14,934	Total Liabilities	23,66,017
Other Assets (Including Intangibles)	1,75,131
Interest Receivables	73,200	Total Equity	2,56,515
Total Assets	26,22,532	Leverage	9.22

в Assets Total Deposits Total Debt Other Liabilties Liabilites 1470666 553868 341483 2 Total cash & Due from Bank 3 Investments - Total 4 Net Loans 5 Real Estate Other than bank premises 6 Net Propert, Plant & Equipment 7 Other Assets (Including Intangibles) 8 Interest Receivables 9 Total Assets 22324 1377582 959121 240 14934 175131 73200 =SUM(B2:38) Total Liabilities =SUM(D2:04) =B9-D6 Total Equity Leverage =D6/D8

2) 9.78% by Equity (i.e. Equity/Total Assets) and 90.22% from Debt (Debt/Total Assets)

3.) Assets have to decline by more than 9.78% to declare bankruptcy as net worth will become negative.