JP Morgan Chase 2013 Annual Report Download - page 14

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II. WE WILL DEDICATE EXTRAORDINARY EFFORT IN 2014
ADAPTING TO THE NEW GLOBAL FINANCIAL ARCHITECTURE
While we will meet all of our new capital
and liquidity requirements this year, we
still have an enormous amount of work to
do to conform and adapt to the plethora
of new global rules.
The changes are substantial and will
require significant changes to business
practices
A quick look at the chart on the next
page will give you a sense of the enor-
mous number of new rules and reporting
requirements with which we need to
comply. They are global and range from
the new European Union (EU) Markets in
Financial Instruments Directive (MiFID)
rules to the 398 Dodd-Frank rules to the
Basel III capital and liquidity require-
ments, the Volcker Rule, and new mort-
gage rules around both origination
and servicing, to name just a few. Fully
complying with and adapting to the new
world is a daunting task and will require
enormous eort and energy on the part of
all of us at JPMorgan Chase. We are going
to get it right – both to meet the letter and
spirit of the new regulations and to mini-
mize disruption to our clients.
These rules will aect every client, every
product, every system and every country
in which we operate. We do not underes-
timate the extent of the changes. Never
before have we focused so much time,
technology, money and brainpower on
such an enterprise-wide undertaking. In
the end, all these eorts will make us a
better and stronger company.
Importantly, these new regulations in
total have unquestionably made the global
banking system safer, more transparent
and more accountable – which is good for
everybody. Every bank is far better capi-
talized than in the past, and the liquidity
in the system probably has never been
higher. In addition, the new rules around
minimum unsecured debt levels, the Recovery
and Resolution plans (or so-called living wills),
and the strengthened capabilities of the regu-
lators have put an end, we hope, to the idea
that anybody is “Too Big to Fail.”
We are applying enormous resources to
the task
Reading the bullet points below will give you
a sense of the time, money and manpower
we are applying to adapt to the new rules:
• 13,000 employees will have been added
since the beginning of 2012 through
the end of 2014 to support our regula-
tory, compliance and control eort (Risk,
Compliance, Legal, Finance, Technology,
Oversight and Control, and Audit) across
the entire firm.
• 8,000 of our employees across our lines of
business will be dedicated solely to building
and maintaining an industry-leading Anti-
Money Laundering (AML) program.
• 500 professionals (and thousands of addi-
tional contributors) were dedicated to
the 2013 resubmission and 2014 submis-
sion of the Federal Reserve’s capital stress
test or Comprehensive Capital Analysis
and Review (CCAR). These individuals
developed and reviewed more than 100
new models and submodels; conducted
over 130 independent qualitative and
quantitative assessments of the firm’s
forecast methodologies and results; and
established new permanent functions and
processes to enhance the firm’s overall
capital planning process.
• 500 professionals globally across our lines
of business and support functions are
working on the firm’s annual Recovery and
Resolution plans.
• 400 people are dedicated to continue to
build out our Liquidity Risk Management
infrastructure, which will create far
more detailed reporting on our daily
global liquidity.