Bank Ratios - Scale Issues

Rule ID: DQC_0139
Status: Final
Release date: September 21, 2022
Effective date: December 1, 2022

Rule function

This rule is intended to identify those cases where the company has used an inappropriate scale to define a bank ratio. This rule looks at capital adequacy ratios to determine the correct scale is used. This specifically addresses those cases where a ratio is greater than 100%, as these ratios can never exceed one. In addition the rule looks at the ratio of one capital adequacy ratio relative to related capital adequacy ratios. The rule is broken down into 6 components which are defined below:

Component 1

Identify those Bank ratios that exceed 100%.

The rule identifies the Bank ratios to check by extracting those pure item type elements in the taxonomy that are children of the following abstract items:

RiskBasedRatiosAbstract,
LeverageRatiosAbstract,
BankingRegulationTangibleEquityRatioAbstract,
BankingRegulationCapitalConservationBufferAbstract,
BankingRegulationLeverageBufferAbstract,
BankingRegulationMaximumPayoutRatioAndAmountAbstract,
BankingRegulationMaximumLeveragePayoutRatioAndAmountAbstract

Component 2

This component identifies those cases where the value of the Tier 1 capital is less than the minimum Tier 1 capital to be adequately capitalized.

Component 3

This component identifies those cases where the value of the banks Assets is less than the banks Risk Weighted Assets. Risk Weighted Assets should not be greater than the banks Assets.

Component 4

This component identifies those cases where the percentage of the Tier 1 capital to be adequately capitalized is greater than the percentage of Tier One capital to be well capitalized. This rule also checks if the company has included a buffer in the reported amount and recommends the extension element to use if the company has reported a value inclusive of the buffer.

Component 5

This component identifies those cases where the value of the Tier 1 capital to be adequately capitalized is greater than the value of Tier One capital to be well capitalized. This rule also checks if the company has included a buffer in the reported amount and recommends the extension element to use if the company has reported a value inclusive of the buffer.

Component 6

This component identifies those cases where the value of Tier 1 capital (TierOneRiskBasedCapitalToRiskWeightedAssets) is less than the minimum Tier One capital required to be adequately capitalized. Tier One capital should generally be greater than the minimum requirement to be adequately capitalized.

Problem solved by the rule

This role resolves the issue where the capital adequacy ratios are reported with an incorrect scale. It also ensures that filers have used the appropriate elements to report their capital adequacy ratios.

Example rule message

Component 1

The element TierOneRiskBasedCapitalRequiredForCapitalAdequacyToRiskWeightedAssets with a value of 8 has a value greater than 1 percent. The measure TierOneRiskBasedCapitalRequiredForCapitalAdequacyToRiskWeightedAssets should have a value between zero and one as this is reported as a percentage. Check that the value has the appropriate scale. In XBRL files a value of 1 is equivalent to 100%.

Period: 2018-06-30
Dimensions: dei:LegalEntityAxis=jpm:BankHoldingCompaniesMember
Unit: pure

Rule Element ID: 9855
Rule version: 19.0.0

Component 2

The value of the Tier 1 capital 45,582,000 is less than the minimum Tier 1 capital to be adequately capitalized with a value of 61,753,000. Tier 1 capital should generally be greater than the amount required to be adequately capitalized. Confirm that the Tier 1 capital or minimum Tier 1 capital to be adequately capitalized has been tagged with the appropriate scale.

The properties of this us-gaap:TierOneRiskBasedCapitalRequiredForCapitalAdequacy fact are:

Period: 2020-12-31
Dimensions: srt:ConsolidatedEntitiesAxis=srt:SubsidiariesMember
Unit: USD

Rule Element ID: 9856
Rule version: 19.0.0

Component 3

The value of the banks Assets of 2,033,713,000 is less than the banks Risk Weighted Assets of 10,000,000,000. Risk Weighted Assets should not be greater than the banks Assets. Confirm that Risk Weighted Assets has been tagged with the appropriate scale.

The properties of this us-gaap:RiskWeightedAssets fact are:

Period: 2021-12-31
Dimensions:
Unit: USD

Rule Element ID: 9857
Rule version: 19.0.0

Component 4

The percentage of the Tier 1 capital to be adequately capitalized of 0.085 is greater than the percentage of Tier One capital to be well capitalized with a value of 0.08.

It looks like the tier 1 capital includes a buffer. If a buffer is used the extension element TierOneRiskBasedCapitalRequiredForCapitalAdequacyWithBufferToRiskWeightedAssets should be used rather than the element TierOneRiskBasedCapitalRequiredForCapitalAdequacyToRiskWeightedAssets.

The properties of this us-gaap:TierOneRiskBasedCapitalRequiredForCapitalAdequacyToRiskWeightedAssets fact are:

Period: 2022-3-31
Dimensions:
Unit: pure

Rule Element ID: 9858
Rule version: 19.0.0

Component 5

The value of the Tier 1 capital to be adequately capitalized of 106,808,000 is greater than the value of Tier One capital to be well capitalized with a value of 100,526,000.

It looks like the tier 1 capital includes a buffer with a value of 31,414,375, if a buffer is used the extension element TierOneRiskBasedCapitalRequiredForCapitalAdequacyWithBuffer should be used rather than the element TierOneRiskBasedCapitalRequiredForCapitalAdequacy.

The properties of this us-gaap:TierOneRiskBasedCapitalRequiredForCapitalAdequacy fact are:

Period: 2022-03-31
Dimensions:
Unit: USD

Rule Element ID: 9859
Rule version: 19.0.0

Component 6

The value of the Tier 1 capital of 6 is less than the minimum Tier One capital required to be adequately capitalized with a value of 8.5. Tier One capital should generally be greater than the minimum requirement to be adequately capitalized.

Confirm that the Tier One capital or Tier One capital required to be adequately capitalized has been tagged with the appropriate scale.

The properties of this us-gaap:TierOneRiskBasedCapitalRequiredForCapitalAdequacyToRiskWeightedAssets fact are:

Period: 2020-12-31
Dimensions:
Unit: pure

Rule Element ID: 9860
Rule version: 19.0.0

For Developers

The Global Rule Logic document contains general guidelines for implementation of rules. The rule message template contains text and parametric reference to arguments of the rule operation, using the syntax ${parameter} to indicate that insertion of a parameter's value is to occur.

General message template

Component 1

The element {$fact1.concept.name} with a value of {$fact1} has a value greater than 1 percent. The measure {$fact1.concept.name} should have a value between zero and one as this is reported as a percentage. Check that the value has the appropriate scale. In XBRL files a value of 1 is equivalent to 100%.

Period: {$fact1.period}
Dimensions: {$fact1.dimensions.join(', ','=')}
Unit: {$fact1.unit} Decimals: {$fact1.decimals}

Rule Element ID: {$ruleId}
Rule version: {$ruleVersion

Component 2

The value of the Tier 1 capital {$fact2} is less than the minimum Tier 1 capital to be adequately capitalized with a value of {$fact1}. Tier 1 capital should generally be greater than the amount required to be adequately capitalized. Confirm that the Tier 1 capital or minimum Tier 1 capital to be adequately capitalized has been tagged with the appropriate scale. The properties of this {$fact1.concept.name} fact are:

Period: {$fact1.period}
Dimensions: {$fact1.dimensions.join(', ','=')}
Unit: {$fact1.unit}\n