080305_JPM Series Fix and Win ... - Börse Stuttgart

which such regulatory requirements are interpreted or enforced, will not have a negative effect on JPMCB’s
ability to conduct its business or its results of operations.
JPMCB faces significant legal risks, both from regulatory investigations and proceedings and from
private actions brought against JPMCB.
JPMCB may be named as a defendant or otherwise be involved in legal proceedings, including class actions and
other litigation or disputes with third parties, as well as investigations or proceedings brought by regulatory
agencies. Such actions brought against JPMCB may result in judgments, settlements, fines, penalties or other
results adverse to JPMCB which could materially adversely affect JPMCB’s business, financial condition or
results of operation, or cause it serious reputational harm.
JPMCB’s ability to attract and retain qualified employees is critical to the success of its business and
failure to do so may materially adversely affect its performance.
JPMCB’s employees are its most important resource and, in many areas of the financial services industry,
competition for qualified personnel is intense. If JPMCB is unable to continue to retain and attract qualified
employees, its performance, including its competitive position, could be materially adversely affected.
Government monetary policies and economic controls may have a significant adverse affect on JPMCB’s
businesses and results of operations.
JPMCB’s businesses and earnings are affected by the fiscal or other policies that are adopted by various
regulatory authorities of the United States, non-U.S. governments and international agencies. For example,
policies and regulations of the Federal Reserve Board influence, directly and indirectly, the rate of interest paid
by commercial banks on their interest-bearing deposits and also may affect the value of financial instruments
held by JPMCB. The actions of the Federal Reserve Board also determine to a significant degree JPMCB’s cost
of funds for lending and investing. In addition, these policies and conditions can adversely affect JPMCB’s
customers and counterparties, both in the United States and abroad, which may increase the risk that such
customers or counterparties default on their obligations to JPMCB.
JPMCB’s framework for managing its risks may not be effective in mitigating risk and loss to JPMCB.
JPMCB’s risk management framework is made up of various processes and strategies to manage JPMCB’s risk
exposure. Types of risk to which JPMCB is subject include liquidity risk, credit risk, market risk, interest rate
risk, operational risk, legal and reputational risk and fiduciary risk, among others. There can be no assurance
that JPMCB’s framework to manage risk, including such framework’s underlying assumptions, will be effective
under all conditions and circumstances. As JPMCB's businesses grow and markets in which they operate
continue to evolve, JPMCB's risk management framework may not always keep sufficient pace with those
changes. For example, as the derivatives markets continue to grow and JPMCB participation in these markets
expands, there is the risk that the credit and market risks associated with new products may not be appropriately
identified, monitored or managed or that the documentation of these trades by JPMCB or its counterparties will
not keep up with the increased pace of settlements. In addition, in the case of credit derivatives that require
physical settlement of transactions, many market participants, including JPMCB, do not always hold the
underlying securities or loans relating to such derivatives; if JPMCB is not able to obtain those securities or
loans within the required timeframe for delivery, this could cause JPMCB to forfeit payments otherwise due to
it.
If JPMCB's risk management framework proves ineffective, whether because it does not keep pace with
changing JPMCB or market circumstances or otherwise, JPMCB could suffer unexpected losses and could be
materially adversely affected. If JPMCB does not effectively manage its liquidity, its business could be
negatively affected.
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