Question

how might JP Morgan Chase be negatively impacted by fluctuations in the money supply?

Answer 1

JP Morgan Chase will be negatively impacted by fluctuations in the money supply in several ways. Fluctuations in money supply will negatively impact JP Morgan Chase’s ability maintain string capital levels at all times and its ability to lend to creditworthy businesses of all sizes will get significantly weakened as well.

Fluctuations in money supply can, in the long run, lead to global trade imbalances, increased level of fiscal deficits, and uncertain interest rate movements. This will have a negative impact on all business lines of JP Morgan Chase – retail financial services, investment bank, card services, commercial banking, treasury and securities services, and asset management. Retail banking, small business banking and consumer lending will all see increased levels of volatility.