Goldman Sachs Thinks JPMorgan Chase Should Be Split Up into Two Entities

Goldman Sachs Thinks JPMorgan Chase Should Be Split Up into Two Entities

The Goldman Sachs Group Inc. thinks that if the largest bank by assets, JPMorgan Chase & Co. was split up into two separate companies then the investors would be able to enjoy 25% more of what the bank is worth now. The analysts of Goldman Sachs say that the returns would ascend with the split of JPMorgan and would offset a boost to the synergies that the bank says it enjoys at present due to its massive size.

The analysts believe that the action "could unlock value in most scenarios, although the range of outcomes we assessed is wide, at 5 percent to 25 percent potential upside."

The recommendation comes from Goldman as the financial watchdogs for some time now have been proposing stricter rules for the largest banks of the nation and penalizing the big concerns for their massive size and working complexities. In short, the phrase "too big to fail" used for some of the biggest banks has taken away the peace of mind of the regulators after the financial crisis hit in 2008.

On Tuesday the shares of JPMorgan Chase & Co. saw a huge amount of trading activity. The stock traders acquired 85,677 call options on the company. The figure represents a boost of around 134% as compared to the average call option volume of 36,555.

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