Large deposits, ones unimaginable for most of us, are going to be charged fees or have to find others who welcome their business.

JPMorgan Chase & Co announced it is aiming to save around $1.4 billion in annual expenses by cutting costs and simplifying businesses mainly in its consumer- and investment-banking units.

JPMorgan is urging some of its biggest customers to take their cash elsewhere or be hit with fees, saying that holding very large deposits has become too costly under new liquidity rules.

It says it is taking the step because it no longer makes financial sense to hold such sums.

As the biggest US bank by assets, and among the most complex and interconnected, JPMorgan feels particularly squeezed by new rules which effectively penalize banks for holding big, uninsured deposits that could flee in the event of a big market shock.

Under the rules, overseen by the Federal Reserve and finalized last September, banks have to maintain higher reserves against such deposits, meaning that they cannot put those funds to more profitable use.

US banks including Bank of New York Mellon and Goldman Sachs are already charging some customers for large deposits, and the Swiss and Danish central banks have both cut their deposit rates to negative territory.

Under the new regime, a big hedge fund or private equity firm would be encouraged to shift excess cash into other JPMorgan products such as money market funds, or find a new bank to hold their money.

The new rules treat various types of deposits differently, according to how likely they are to be withdrawn in a crisis. Retail deposits, which are covered by federal insurance, are seen as less likely to be pulled out, so require banks to hold reserves of as little as 3 per cent against them. The reserve requirement rises to 40 per cent for some corporate deposits, however, and as much as 100 per cent for deposits from other financial institutions.
“Clients know that we are doing this because we have no choice”

The bank is determined to resist calls for a break-up. JPMorgan has been hit by about $22bn in post-tax legal costs since 2010, prompting politicians, regulators and analysts to argue that it has grown too big to manage.

Ms Lake said splitting into two would lead to about $3bn in lost cost synergies, damaging the ability of the bank to invest throughout business cycles, while shrinking the excess capital available to shareholders.