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Reuters’ David Henry reported that JPMorgan Chase may have contributed to the dangerous spike in overnight lending rates on September 17 by withdrawing liquidity from the system. The loss of liquidity triggered the New York Fed’s operation to pump billions of dollars of overnight and term loans into Wall Street each week since then. Henry wrote:

“Analysts and bank rivals said big changes JPMorgan made in its balance sheet played a role in the spike in the repo market, which is an important adjunct to the Fed Funds market and used by the Fed to influence interest rates…

“Publicly-filed data shows JPMorgan reduced the cash it has on deposit at the Federal Reserve, from which it might have lent, by $158 billion in the year through June, a 57% decline.”

The move by JPMorgan Chase, whose Chairman and CEO, Jamie Dimon, is the only person at the helm of a major Wall Street bank to have come through the 2007-2008 financial crisis, suggests that the bank is “getting closer to home” with its money, as the former CEO of Goldman Sachs, Lloyd Blankfein, phrased it during the last financial crisis.

This would not be the first time that JPMorgan Chase put its own interests ahead of the not so subtle nudges of the New York Fed.