JPMorgan Traders Are Stepping In On Risky Deals Where Banks Won't
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Though commercial banks have largely backed off from financing risky developments after the 2008 financial crisis, some lenders are growing increasingly creative in their efforts to fund projects not eligible for loans through big banks.
Take traders in JPMorgan’s investment bank, for example. They have expanded their services from selling commercial mortgage-backed securities to underwriting loans not suitable for bonds, Bloomberg reports. These include huge construction projects, with the desk helping fund the troubled American Dream mega-mall in New Jersey.
The biggest bank in the US by assets, JPMorgan is stepping forward and taking on more risk just as traditional lenders pull back. Many experts are puzzled, saying it’s a surprising time for the bank to move into construction while the environment only gets more challenging. [Bloomberg]