When JPMorgan CEO Jamie Dimon Speaks, the World Listens | The Circuit

I'm here in London. It's a busy Monday morning and I'm about to meet one of the titans of banking. Hello. You guys love these meet and greets. We make. How are you? It's good to have a good handshake. Have we ever met? I feel like I knew you because I've seen you so many times. Vice versa. Jamie Dimon is an institution. Since 2005 he has been director of the

world

's largest bank, JP Morgan Chase. He is widely seen as a rock in the storms of 21st century finance and, at times, even a kind of guardian of the American and global economy.

He is a leader and understands the importance of stepping forward at a time

when

there is great uncertainty. This country is much better off because Jamie Dimon has been running JP Morgan. He is also a very visible figure in the banking

world

. He is always in demand for media appearances where he reliably delivers hot takes on current events. I don't care what Bitcoin is traded in. How it is marketed, cable is marketed, who is marketed. If you are stupid enough to buy it, you will pay the price one day. Dimon always seems ready with a compelling take on current events, but I wanted to zoom out and talk about his broader philosophy to learn the principles that guide the decision-making of this incredibly influential person, a family man from Queens who at least as committed to being a father and grandfather as he is to shaping the global economy.

So you're traveling, how often? Actually, I say we checked last year like 120 nights or something like that. But part of this is because Covid catches up. I feel like I need to visit people. Good. And all these conferences are going on again. And of course, I'm here. I do more than just this conference, then. Good. Do you have any tips for traveling? What does that mean? You know, ways to make your life easier? Yes. Well, I try

when

I land, when I exercise, when I eat, when people don't torture me. You have a lot of Bloomberg people here.

This is the Jamie Dimon treatment. Exactly. How long have you been at Bloomberg? I've been at Bloomberg for 13 years. Where are you from? I am originally from Hawaii. Hawaii, yes. And married. Married children, four children. My God. Yes. How do you do it? What do you mean? How did you juggle it all? I pretty much had a binary life. I worked and had a family, so you didn't see me in black ties and red carpets and very strange things like that. Such a great family life. I know, I heard you're a family man. Yes. How old are your daughters now? 38, 36, 34 and seven grandchildren, six girls and finally a boy.

Do you take care of children? Yes. My wife does more than me, but I do it. We do it together. They come to sleepovers and all that kind of stuff. Any advice for parents? Just love them. Yes. Yes. So what do you like to do with your daughters now? All. We barbecue, we eat, we go to restaurants, we travel, we listen to music, we make wine. I love my sons-in-law. It's quite an ordeal to meet Jamie Dimon as your future father-in-law. They don't have any problem. I'd be shaking and God knows if I ever say something I'm wrong, they'll correct me like they like to fight me about something.

If that sounds modest. Well, there's nothing modest about Dimon's. Professional life. JP Morgan Chase is the world's largest bank by market capitalization and one of the largest companies of any type. In 2023, they set a record for the highest profits of any American bank. 49.6 billion dollars. It is no exaggeration to say that entire economies depend on this bank. JP Morgan played a crucial role in stopping the bleeding during the financial crisis of 2008. The better we do here, the better it will be for the US economy. And, more recently, he took steps to mitigate the damage caused by the collapse of Silicon Valley Bank and First Republic.

Dimon regularly

speaks

with prime ministers and presidents around the world and there has been much speculation that he might one day run for office. All of this translates into a great deal of power and influence. He has created a bank with $4 trillion in assets and counting. How big is too big? I think the question is what works for consumers, industries and things like that? So if you want to build a Boeing airplane, you have to be big. You can pretend it's not like that. If you want to do what JP Morgan does, we move $10 trillion of money around the world every day.

We operate with some of these companies in 30 countries. We bank countries, we bank the World Bank, the IMF, we bank the United States government. You have to be great. You can't do those things and be small. I applaud the small banks. For us, we're the largest bank for community banks and regional banks and things like that. And I understand, you know, some of the stress that they're under, we're trying to help. So it's neither one nor the other. So if we look at the bigger picture a little bit, you run the largest bank in the world, you have our money, you have the world leaders on speed dial.

That's a lot of power. How do you decide when and how to exercise that power? Yeah, I'm not sure there are many people who do that, so you say all that. Sometimes I think I'm just riding the Bronco and hanging on for the life of the contract. I, you know, love what I do. I try to talk to everyone. I try to keep my mind open. I, one of the benefits of traveling the world, you know, is just being in Mumbai and Switzerland and seeing clients, you learn a lot and try to make sure that you're doing the right assessment of the world.

You are looking at the options. You're not like just saying let's do this. I think it's part of our job to try to get countries to help countries do the best they can for their citizens. So we bank the countries. We also advise them on skills, trade and economics. If you look at our research, it's a lot about how an economy works. So when you go, like when I came back from Mumbai, we researched 150 companies now or something like that. That's why we're educating the world about those companies. We are educating the world about the Indian economy.

By doing so, we educate and also educate Indians about what works in their economy and what doesn't. And those are important things to improve society. You have a reputation for being a kind of white knight of the economy. Did you ever feel pressure to make the save? I feel tremendous pressure to do it. Obviously my family comes first, that's fine. But in order to do great work for my company and our clients, I also feel a huge burden to do good work for my country. So, you know, when my country wants me to do something and we talk to senators and regulators all the time, what can we do to improve the system?

To raise the country, rise in the cities. We're trying to figure out how to improve society and I consider that to be part of our job. You grew up talking about finances at the kitchen table as a child. What was it like growing up Jamie Dimon? What do you think he prepared you for all of this? Well, I grew up in Jackson Heights, Queens and all three of my grandparents were Greek immigrants. One was born here. I don't think any of the four of them finished high school. It was a noisy table, people arguing and stuff like that.

But my parents did, while my father was a stockbroker, you know, I was the only one who was interested in reading the newspaper and understanding it. I bought stocks when I was 12, 13 or 14 years old. You know, they didn't ask us to go into finance. So my older brother is a physicist, my other brother is a professor. Basically, it was about doing the best you could, making the world a better place, treating everyone with respect, having a purpose in life. It was more about that, but there was a lot of intellectual debate at the table. Dimon quickly rose through the ranks of the financial sector right out of Harvard Business School.

He became the protégé of his father's boss, Sandy Wild, a legendary banking business. Dealmaker, Dimon and Weill together oversaw a series of massive bank mergers during the 1980s and 1990s until 1998. Weill forced Dimon out of Citigroup and Dimon became independent. Dimon landed as CEO of Chicago-based Bank One When JP Morgan Chase acquired Bank One in 2004, Dimon quickly rose to the top spot. Just a couple of years later, in 2007, Dimon warned shareholders that the bank was having problems in its subprime mortgage business. When the financial crisis hit. JP Morgan's relatively cautious investment approach meant they were able to help avert catastrophe by acquiring Bear Stearns and struggling Washington Mutual.

That saved the government billions in bailouts and made Chase the largest commercial bank in the United States. Although American banks received some well-deserved criticism during this time. Dimon emerged as a strong advocate for JP Morgan and the financial system as a whole, as a force for good for 224,000 employees. We provide healthcare to 4,000 people. We pay 10 million dollars a year in federal taxes. In the last five years we have donated $600 million to organizations. This is a great company. And when I hear the constant vilification of corporate America, I personally don't understand it and I would ask many of our employees in government to stop doing it.

Because I think right now it's just hurting our country. More crises would follow. In 2012, a dishonest JP Morgan trader, nicknamed the London Whale, lost the company more than $6 billion, putting Dimon at the center of the scandal and calling into question his leadership. But Dimon weathered it all and kept the top job, even as other big U.S. banks have gone through various CEOs along the way. He became a multimillionaire, something rare among banking executives. Many attribute Dimon's success to what is known as balance of strength. Essentially, he takes a cautious approach, never reaching such excessive leverage that the bank cannot withstand a major unforeseen shock.

The strategy has been criticized for leaving profits on the table, but it seems pretty smart when a crisis hits. A long time ago, I used to give a presentation on financial crises. You know, going back to those explosions in Ginnie Mays, Penn Central's business newspaper. The crash of '87. The recession of '90, the recession of '74. And if you make a list of all those things, you realize, and I'm not making fun of all of them, that they happen all the time. And the best preparation is in our commercial capital and liquidity, which Dodd-Frank improved. We already had a lot prepared.

You know, you can't be prepared after the fact. You have to be prepared before the fact. When I talk about risk management, it's always about the variety of outcomes that we manage and, beyond that, we talk about geopolitical crises, cyber crises, you know, I put cyber, you have to be prepared for those things and it happens and it's going to happen. surprise you one day. Like, you know, I would be surprised if oil, well, I would be surprised if oil went to 50. I won't. Yes, it can easily happen if several factors fall in a certain way.

So it is best to be prepared for any business. When you think about risks, think about things that can go horribly wrong. Can you survive them? You know, it could be technology, it could be government regulations, it could be, it could literally be the weather. If you're a restaurant, that could put you out of business if you know, if you lose this week's business, you'll be out of business. You have enough cash. Then you should think about all that carefully. Bill Gates once said that banking is necessary, but banks are not. To what extent could AI or FinTech replace traditional banks?

First of all, I remember him saying that banks are dinosaurs. I spoke to him about this in 1997 and he was obviously completely wrong. He would probably agree with that, but he's not wrong. That technology changes everything. And if someone is complacent or arrogant or thinks that because he has a great position today, he will have a great position tomorrow. That is an error. And, but then you have this fine, what is banking? Someone will have to hold the money, someone will have to move the money, someone will have to raise the money. So we have to investigate, you know, about money.

Those services will still exist and, you know, hopefully we will and we will use a lot of technology to make it better. But I've always thought that it's very possible that some element of technology eliminates a part of that and I've been writing about, you know, big technology in our business. We have FinTech, but we also have big tech that will bring payment systems in there and some will be white label banks, kind of like what Apple did. You know they have the right to do that. I'm not against that. I would be against unfair use of your position to dominate us in a business.

Well, Apple is delving deeper into financial services. No doubt. Are you worried about Apple's bank? Well, let's compete. So they have a tough competitor, but you know, they have money. Move money. Yes, they are kind of a competitor. You know, we partner with them too. But I'm very used to associating and competing with a lot of people. Existential threat. I don't think it's an existential threat, butI think if we were complacent about it, yes. Still, as with most industries, an AI revolution for finance is coming. The question is how much will banking change? Some predict that AI will allow us to put our money on autopilot, telling you where to invest, planning for your retirement, and even filing your taxes.

I know you mentioned GPT chat in your annual letter. Have you tried it? Yes, if I had my phone, I would show it to you. What, what do you use it for? I'm just asking you questions: Like what? I don't remember, what is Emily Chang going to ask me? You have a top-notch group researching AI. What are they doing? What is the next level of finance you think AI can unlock? Yes, I think the most important thing is that AI is real. We already have thousands of people doing it. The best scientists from around the world, Manuel Veloso, who headed Carnegie Mellon.

Machine learning is a living, breathing thing. So people want to answer, what are you going to do? It is a living, breathing thing. It's going to change, there will be different types of models and different types of tools and technology. But for us what we must think about is each process. So in bugs, trading, coverage, research, every application, every database, AI will be applied. Then it could be as a co-pilot to replace the humans. As you know, AI does all the stock coverage for us, most of it is idea generation, it's great language models. It's taking notes while you talk to someone.

And as you're taking notes, you might tell them that, you know, this is what's interesting: The customer might be interested in all the mistakes, all the customer service. It's a little bit of everything, but it will replace some jobs. Of course. Yes. But I, I see that the physical education people have to breathe deeply, okay? Technology always replaces jobs. Their children live to be a hundred and are cancer-free thanks to technology and will literally probably work three and a half days a week. So technology has done incredible things for humanity. But you know, planes crash, pharmaceuticals are misused.

There are negative aspects. This, in my opinion, the biggest negative is that bad people use AI to do bad things. Think cyber. But you know, the fact, and I think, you know, eventually having legal barriers around it, it's a little bit difficult to achieve because it's new but it will add a lot of value. And you know, for JP Morgan, if it replaces jobs, we hope to redeploy people. So that will be a point where I can have a conversation with JPM and say I'm 30 or I want to get rich quick. What should I do with my money?

Well, quick, rich man, I hope he tells you that you're crazy. Yes, but in some ways we can already do a little today. And you know, typically if you look at the estate plans that we have, which I think are pretty good, they have a lot of AI built in, you know, or analytics built into that. And if we have more AI before, all the AI ​​will do is know more about you, learn more about you, look at patterns and you know, look at successful things in the past and yeah, then AI will be a big help for things like that . .

Interesting. Yes. So do you see it as a financial super app in our future? Yes, you already have that a little bit. So 10 years ago I took on the people who ran the retail, Gordon Smith and a whole team. I said, you will take a plane and go to China. And they said, why are we Americans? I said, go to China, you know, and they went to Pingan, Tencent, WeChat, Alipay and all that and they had all the super apps. I had them go back and make a big super app chart. All the services they do, what they do is a lot.

WeChat, for example, combines text messaging, a social network and a widely used mobile payment system and has more than 1.2 billion active users. The kind of ubiquity that most American companies can only dream of. So I think in the United States it won't be a super app, it will be, I'll call them mini super apps. Maybe you can already do a lot of things with us around money, but that's why we travel. It's an adjacency, it's not just a credit card. Now we want to offer you great trips, great hotels and great restaurants. And so there are all these adjacencies in everything we do that will be driven by technology and will be increasingly driven by AI.

What is your biggest fear of AI? Well, I think Henry Kissinger and Eric Schmidt wrote a book about, you know, whether it's used in weapons, but, you know, and that could obviously be terrifying if you're trying to decide who the enemy is. And then, you know, obviously it's going to be used in cyber, the bad guys are going to use AI and well, I think we need security barriers. No one knows exactly what they should be yet, but that won't stop the bad guys. So we have to think beyond the security barriers here. If you want to have a lot of innovation, you need railings.

You know, maybe it tells you something deep down, this is AI generated, but the bad guys still use it. And the question is how are we going to do it, that worries me a little. While AI is changing, banking geopolitics technology is creating a different kind of disruption, with tensions between powerful countries like the United States, Russia and China reaching a boiling point. There are signs that the economic ties that bind the world are beginning to fray. Dimon, for his part, adopts a tone of cautious optimism about current events, but warns that we live in very dangerous times.

Our conversation took place before the recent outbreak of conflict in the Middle East, which he said will create ripple effects that will spread far beyond the region. Where is China on the risk list? When I say geopolitical, that's the most important one. It's the thread of Ukraine, oil and gas, food migration, all our relationships. The most important is China. That is the most important thing for the future of the world. And obviously Ukraine is affecting it and in fact it's very difficult to see really positive results with China until the Ukraine war is resolved. Let's hope the Ukrainians can say they have achieved some kind of victory.

You've said you're worried about another Trump presidency, how worried we seem, we need good American leadership and I think we need to explain to people why they're so important to the world, you know? And so there's a little bit of this, you know, America first and you know, no American president is going to say America second, but what we have to explain is why Ukraine is important to us and why American security It depends on global security. and why our allies depend on it. And if they can't trust the United States, they will have to depend on someone else.

And so I think it's very important. You know, Bob Gates writes in his book The Exercise of Power about the symphony of power and all the soft things, not the military, which we have abused, but diplomacy, development, finance, education, communication, everything and Obviously, the economics. , trade, investment, all those things. And I think we need to do a better job at that. You are revered for your long-term vision. So I'd like to go over a few topics quickly and get a long-term view from a single sentence. What is your long-term vision for China? Everything will be fine, but we need really good American leadership to get it done.

And let's not worry, they are not a 10 foot giant, they have a lot of problems. The United States has many tensions. We should, I like the fact that the American government talks to them constantly. Now Crypto, if you mean crypto like Bitcoin, I've always said it's a fraud. There is no hope for it. Well, if so, if you think there is a currency, there is no hope for it. It is a Ponzi scheme, it is decentralized public. If it's a cryptocurrency that can do something like, you know, a smart contract that has value, there will be smart contracts and blockchain will work.

So to the extent that cryptocurrencies access certain blockchain things, yes, that could have some value. American leadership, the most important thing for the world in the next hundred years. Warren Buffet would tell you that one of the best things about America is our constant resilience, our ability to adapt, adapt. I mean, we adapted pretty quickly to bad Covid and then we came out of Covid and, and American leadership moves pretty quickly and, you know, autocratic leadership stagnates. So you have to look, yes, sometimes democracies are messy, but they also allow for change. Dimon is 68 years old and the question of succession looms in 2021.

He received a bonus to stay another five years. And while several JP Morgan executives are rumored to be vying to replace him, nothing official has been announced. Given the success of Dimon's 18-year career, no one is particularly eager for him to move on. And at the moment he shows no signs of slowing down. What advice would you give your 20-year-old self? You have to work hard. Me, not that, but, but, but I work smart. You know, a lot of people don't do it, they waste a lot of time and don't think carefully. And there is a great quote, I'm sorry I wrote you such a long letter, I didn't have time to write a short one.

That's respect for people, you know, you put your thoughts in order, you have a decision-making process. Don't let yourself become a weapon at all. Like, you know, or, and no, I don't have it to the extent that I have a bad temper. It works against you. You always have to end by apologizing, have a thought process about things that are complicated and you, and you will get better at life. You don't have to answer everything at once. You know, I tell all people, Jade Morgan, that everyone should take care of their mind, their body, their spirit, their soul, their friends, their family, their health.

They have to do that. It's part of your life. If you screw it up, everything else becomes particularly difficult. So I once heard a great speech from a woman who said you can have it all, you can just have it all at the same time. I like that advice. Yes. What else do you want to achieve in the world besides making your bank successful? The most important family and I have three wonderful children and two wonderful sons-in-law. Seven great-grandchildren. That's the most important thing, you know, the second most important thing is my country, the United States of America.

I'm a red-blooded, full-throated, free-enterprise American patriot, and don't get me wrong. Therefore, that is a great effort from me personally and from the position of my country. The company supports this to the extent we should. And then within the company, I just hope people say, you know, we're going to miss the son of a bitch when he's gone. And he made the world a better place and created opportunities for all of us and our customers. Are you sure you're not running for office? I'm pretty sure it is. I just talked to some friends who left the United States and they told me that if you applied, they would come back.

I got four more votes.