For many people, the idea of a bank worth a trillion dollars is a concept that seems almost inconceivable. But that is exactly what is expected to happen with the multinational investment bank JP Morgan Chase & Co in the next seven years.
With headquarters in the United States and services in Australia and around the world, the bank is predicted to hit a staggering market capitalisation of US$1 trillion (AU$1.48 trillion) by 2030.
This enormous record valuation is set to be largely driven by rising interest rates and inflation, both of which have been major contributing factors to the cost of living crisis worldwide.
Interest rates and inflation are two key factors that have helped JP Morgan Chase & Co increased its market capitalisation. With rising interest rates, the bank is able to charge more for loans, which increases its revenue.
At the same time, inflation means the value of the bank’s assets increases, which in turn increases its market capitalisation.
A scathing assessment from the Australian Institute has revealed that exorbitant corporate profits have contributed to the cost of living crisis.
JPMorgan currently has a market cap of US$410 billion (A$609 billion), a four per cent rise from the start of the year, making it one of only four companies in the world to be valued at over US$1 trillion, according to Bloomberg.
This week, there was heavy criticism of a major Australian corporation for achieving record profits while exploiting their customers in a so-called greed-driven price cycle.
The Australian Institute’s harsh findings released on Friday revealed that Australia’s inflation would have stayed within the Reserve Bank of Australia’s (RBA) desired range if businesses had avoided taking advantage of consumers during the pandemic by raising prices too much.
The Australian Institute discovered that Australian businesses increased prices by a total of $160 billion annually, an amount much greater than needed to compensate for increasing expenditures such as labour, taxes, and supply chain concerns.
