“At the end of 2010, Bank of America had $17 billion in total cross-border exposure in Japan, which amounts to 0.75 percent of total assets,” a spokesman for Bank of America said in an email. “So I would describe our exposure as small.”
JPMorgan’s position was described as “manageable” by a spokeswoman. The bank takes into account “the types of exposures we have to counterparties in the country,” she said.
A spokeswoman for Morgan Stanley declined to comment on the bank’s exposure to Japan. Goldman Sachs did not respond to requests for comment by press time.
Perhaps the biggest risk to banks is the impact of the disaster on their capital markets businesses, Mike Mayo, analyst at CLSA said in a report.
Customer activity could be disrupted, and asset values might tank. But in the long run, investment banking could benefit as Japanese companies seek funds to rebuild. Equity and debt underwriting will thrive when this happens, Mayo says.