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Restrictions on Cash and Intercompany Funds Transfers
12 Months Ended
Dec. 31, 2016
Restrictions on Cash and Intercompany Funds Transfers Disclosure [Abstract]  
Restrictions on Cash and Intercompany Funds Transfers
Restrictions on cash and
intercompany funds transfers
The business of JPMorgan Chase Bank, National Association (“JPMorgan Chase Bank, N.A.”) is subject to examination and regulation by the OCC. The Bank is a member of the U.S. Federal Reserve System, and its deposits in the U.S. are insured by the FDIC, subject to applicable limits.
The Federal Reserve requires depository institutions to maintain cash reserves with a Federal Reserve Bank. The average required amount of reserve balances deposited by the Firm’s bank subsidiaries with various Federal Reserve Banks was approximately $19.3 billion and $14.4 billion in 2016 and 2015, respectively.
Restrictions imposed by U.S. federal law prohibit JPMorgan Chase & Co. (“Parent Company”) and certain of its affiliates from borrowing from banking subsidiaries unless the loans are secured in specified amounts. Such secured loans provided by any banking subsidiary to the Parent Company or to any particular affiliate, together with certain other transactions with such affiliate, (collectively referred to as “covered transactions”), are generally limited to 10% of the banking subsidiary’s total capital, as determined by the risk-based capital guidelines; the aggregate amount of covered transactions between any banking subsidiary and all of its affiliates is limited to 20% of the banking subsidiary’s total capital.
Prior to the establishment of the IHC in the fourth quarter of 2016, the principal sources of the Parent Company’s income were dividends and interest from the various bank and non-bank subsidiaries of the Firm; the principal source of the Parent Company’s income, commencing with the fourth quarter, will be dividends from the IHC and JPMorgan Chase Bank, N.A., the two principal subsidiaries of the Parent Company. In addition to dividend restrictions set forth in statutes and regulations, the Federal Reserve, the OCC and the FDIC have authority under the Financial Institutions Supervisory Act to prohibit or to limit the payment of dividends by the banking organizations they supervise, including JPMorgan Chase and its subsidiaries that are banks or bank holding companies, if, in the banking regulator’s opinion, payment of a dividend would constitute an unsafe or unsound practice in light of the financial condition of the banking organization.
At January 1, 2017, JPMorgan Chase’s banking subsidiaries could pay, in the aggregate, approximately $20 billion in dividends to their respective bank holding companies without the prior approval of their relevant banking regulators. The capacity to pay dividends in 2017 will be supplemented by the banking subsidiaries’ earnings during the year.
In compliance with rules and regulations established by U.S. and non-U.S. regulators, as of December 31, 2016 and 2015, cash in the amount of $13.4 billion and $13.2 billion, respectively, were segregated in special bank accounts for the benefit of securities and futures brokerage customers. Also, as of December 31, 2016 and 2015, the Firm had receivables within other assets of $16.1 billion and $15.6 billion, respectively, consisting of cash deposited with clearing organizations for the benefit of customers. Securities with a fair value of $19.3 billion and $20.0 billion, respectively, were also restricted in relation to customer activity. In addition, as of December 31, 2016 and 2015, the Firm had other restricted cash of $3.6 billion and $3.1 billion, respectively, primarily representing cash reserves held at non-U.S. central banks and held for other general purposes. Prior period amounts for segregated cash, receivables within other assets, and other restricted cash have been revised to conform with the current period presentation.