The Risk Management Committee of JP Morgan Chase strongly believes that it is able to leverage its vast information on its borrowers around the world to manage its credit risks efficiently. Further, JP Morgan Chase is continuously exposed to multiple capital markets around the world. Specifically, they are involved as an investor and speculator in the global stock, bond, currencies, commodities and derivatives markets.

Required

Based on this summarised information, formulate a proposal to the United States Federal Reserves on the best method to mitigate these risks. Your justifications must be based on the principles of Basel capital regulatory framework.

(15 marks)