The nation’s largest bank JPMorgan (NYSE:JPM) is facing a painful $1.5 billion fee that may also be felt by various other banks later this year.
The Federal Deposit Insurance Corporation’s board of directors approved a proposal to raise the fees banks pay to have depositors’ money insured.
This comes after the government insured depositors’ money that exceeded the $250,000 insurance cap at Silicon Valley Bank and Signature Bank to stem the panic that ensued from their failures.
In total, that depleted $15.8 billion from the FDIC’s Depositor Insurance Fund (DIF).
Banks that are FDIC-insured pay fees to the fund in exchange for coverage in the event that they fail.
To recover the $15.8 billion, the FDIC is proposing levying higher fees on banks that have more than $5 billion in uninsured deposits.
The FDIC is focusing on these banks since they benefited the most from the FDIC’s unprecedented actions in the wake of the collapse of SVB and Signature Bank, according to CNN.
The proposed rule would charge banks 0.125% annually for two years on all their uninsured deposits as of the end of last year after deducting $5 billion.
JPMorgan Chase would pay around $1.5 billion in additional fees given the bank had around $1.2 trillion in uninsured deposits at the end of 2022, according to FDIC records.
Is JPMorgan in Trouble?
Dr. Stephen Leeb, one of the world’s top money managers, says that JPMorgan’s gold derivate short positions are so numerous and large that they likely exceed the entirety of the bank’s assets on hand – “which is a very dangerous position in which to be.”
“Should the price of gold ever shoot up from its current price by, say, another $1,000 in the coming weeks or months due to an unexpected “black swan” event, banking giant JPMorgan Chase would more than likely find itself underwater due to the massive gold derivative short positions it currently holds,” says Planet Today.
JPM stock is now down -0.75% this year-to-date and its CEO Jamie Dimon has begun to raise concerns around the shorting of bank stocks.
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Earlier this week, the CEO urged the SEC to ban the shorting of bank stocks.
Days after White House press secretary Karine Jean-Pierre said President Biden’s administration was looking into short seller activity around bank shares in the United States, triggering predictions of a possible ban, JPMorgan CEO has expressed his view that short-selling of bank stocks should, indeed, be prohibited.
“Professional shorts are paraded on national television all day long allowed to present their “thesis” often with rebuttal from anchors or target and major firms including JP Morgan can pound the market and specific stocks day in and day out now a line has been crossed? GTFO,” said FOX Business’s Charles Payne.
“People going short and then making a tweet about a bank should be punished to the full extent of the law,” said JPMorgan CEO Jamie Dimon.
Retail investors argue that banks and hedge funds use mainstream media for ‘short and distort’ campaigns when targeting small or struggling companies.
Is JPMorgan in trouble?
It certainly seems like they’re concerned about karma (in terms of shorting) catching up to them.
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