JPMorgan Chase CEO Jamie Dimon is calling for a full commitment to American ideals as his bank navigates geopolitical uncertainty, a faltering economy and the revolutionary impact of artificial intelligence.
In his annual letter to shareholders released Monday, Dimon called the country’s 250th anniversary “the perfect time to rededicate ourselves to the values that defined this great nation – liberty, freedom and opportunity.”
“The challenges we all face are significant. The list is long, but at the top are the horrific ongoing war and violence in Ukraine, the current war in Iran and broader hostilities in the Middle East, terrorist activity and growing geopolitical tensions, particularly with China,” Dimon said. “Even in difficult times, we are confident that America will do what it has always done: honor the values that have defined our unique nation and underpinned our leadership in the free world.”
Dimon, the longtime leader of the world’s largest bank by market capitalization, is among the most outspoken U.S. corporate leaders. His annual letter provides not only a report on his company’s performance, but also wide-ranging insights into the global situation.
In Monday’s letter, Dimon pointed to headwinds including global conflicts, persistent inflation, private market turmoil and what he called “poor banking regulation.”
Dimon said that while regulations like those put in place after the 2008 financial crisis “have done some good things … they have also created a fragmented, slow system with expensive, overlapping and excessive rules and regulations – some of which have made the financial system weaker and reduced productive lending.”
He pointed in particular to the negative impact of capital and liquidity requirements, the current design of the Federal Reserve’s stress test and a “poorly managed” process at the Federal Deposit Insurance Corp.
Dimon also said JPMorgan’s reaction to the revised Basel 3 endgame proposals and a global systemically important banks (GSIB) surcharge issued by U.S. regulators last month was “mixed.”
“While it was nice to see that the recent Basel 3 Endgame (B3E) and GSIB proposals attempted to reduce the increase in required capital compared to the 2023 proposals, there are still some aspects that are frankly nonsensical,” Dimon said.
The CEO said that given the overall proposed surcharges of about 5%, “for the vast majority of loans to U.S. consumers and businesses, the bank would be required to hold up to 50% more capital than a large non-GSIB bank for the same loans.”
“Frankly, it’s not right and it’s un-American,” he said.
About trade and geopolitics
Dimon identified geopolitical tensions as a key risk to his bank, particularly the wars in Ukraine and Iran and their impact on commodities and global markets – describing the war as “the realm of uncertainty.”
“The outcome of current geopolitical events could well be the decisive factor in the development of the future global economic order,” he said. “On the other hand, maybe that’s not the case.”
He also referred to a “realignment of economic relations in the world” brought about by US trade policy. US President Donald Trump has made tariffs a hallmark of his second term, imposing higher tariffs on dozens of trading partners and import categories.
“The trade fights are clearly not over, and many nations are expected to examine how and with whom they should strike trade deals,” Dimon said. “While some of this is necessary for national security and resilience, which are of paramount importance, it is difficult to assess the long-term impact.”
In private markets
Dimon also discussed recent turmoil in private markets as fears over loans to software companies lead to massive redemption requests from private debt funds.
“By and large, private loans do not have much transparency or rigorous appraisal criteria for their loans – which increases the likelihood that people will sell if they believe the environment is deteriorating – even if actual realized losses change little,” Dimon said.
The executive added that the actual losses relative to the environment are already higher than they should be.
“However the situation develops, it is expected that insurance regulators will at some point insist on more stringent ratings or haircuts, which will likely lead to demands for more capital,” he said.
There is an AI
Dimon reiterated Monday that the speed of AI adoption is unlike any other technology before. He said that while the implementation will be “transformal,” it remains to be seen how the AI revolution will unfold.
“Overall, investing in AI is not a speculative bubble and will yield significant benefits. However, at this point we cannot predict the ultimate winners and losers in AI-related industries,” Dimon said.
“We won’t bury our heads in the sand. We will use AI, just as we use all technology, to do better work for our customers (and employees),” he wrote.
JPMorgan was at the forefront of Wall Street firms adopting AI at every level of their business. Last year, JPMorgan Chief Analytics Officer Derek Waldron gave CNBC an early demonstration of how the company is using agent AI to accelerate work and improve outcomes for customers and shareholders.
In February, Dimon said AI was transforming JPMorgan’s workforce and that the bank had “huge redeployment plans” for employees.
“We focused on some of the ‘known and predictable’ and some of the ‘known unknown’ events,” he said. “But major technological changes like AI always have second- and third-order impacts that can have profound impacts on society. … We should also keep an eye on this type of transformation.”
— CNBC’s Leslie Picker and Ritika Shah contributed to this report.
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