The impact of geopolitical risks on international banking flows: Case study of JPMorgan Bank

Abstract

This research analyzes the effect of geopolitical risk on international banking flows by examining the case of JPMorgan Chase over the period 2010–2023. A time-series analytical framework is employed to evaluate how geopolitical uncertainty influences cross-border financial activities, considering bank-specific characteristics such as capital adequacy and liquidity, as well as selected macroeconomic indicators. The findings suggest that geopolitical risk has a significant negative impact on international banking operations, indicating that rising global uncertainty constrains cross-border financial activities. Conversely, stronger capital and liquidity positions enhance the bank’s ability to withstand external shocks. Meanwhile, macroeconomic variables such as GDP growth and interest rates do not show a statistically significant effect within the model. The study provides new insights into the role of geopolitical risk as a key driver of international banking behavior at the institutional level, emphasizing its growing importance in financial decision-making and risk management strategies