JPMorgan CEO Jamie Dimon annual letter cites risks in geopolitics, AI,

JPMorgan Chase CEO Jamie Dimon is calling for a broad recommitment to American ideals as his bank navigates geopolitical uncertainty, a teetering economy and the revolutionary impact of artificial intelligence.

Dimon in his annual letter to shareholders, published Monday, noted the country’s 250th anniversary as “the perfect time to rededicate ourselves to the values that made this great nation of ours — freedom, liberty and opportunity.”

“The challenges we all face are significant. The list is long but at the top are the terrible ongoing war and violence in Ukraine, the current war in Iran and the broader hostilities in the Middle East, terrorist activity and growing geopolitical tensions, importantly with China,” Dimon said. “Even in troubled times, we have confidence that America do what it has always done — look to the values that have defined our singular nation and sustained our leadership of the free world.”

Dimon, the longtime leader of the world’s largest bank by market cap, is among the most outspoken of U.S. corporate leaders. His annual letter offers not only a matter of record for his firm’s performance, but also sweeping perspectives on the global state of affairs.

In Monday’s letter, Dimon noted headwinds including global conflicts, persistent inflation, private market upheaval and what he called “poor bank regulations.”

Dimon said that while regulations like those put in place after the 2008 financial crisis “accomplished some good things … they also created a fragmented, slow-moving system with expensive, overlapping and excessive rules and regulations — some of which made the financial system weaker and reduced productive lending.”

He specifically cited negative consequences of capital and liquidity requirements, the current construction of the Federal Reserve’s stress test and a “badly handled” process at the Federal Deposit Insurance Corporation.

Dimon also said JPMorgan’s reaction to revised proposals for Basel 3 Endgame and a global systemically important bank (GSIB) surcharge — issued by U.S. regulators last month — were “mixed.”

“While it was good to see that the recent proposals for the Basel 3 Endgame (B3E) and GSIB attempted to reduce the increase in required capital from the 2023 proposals, there are still some aspects that are frankly nonsensical,” Dimon said.

The CEO said the aggregate proposed surcharges of about 5%, the bank would need to hold “as much as 50% more capital across the vast majority of loans to U.S. consumers and businesses when compared with a large non-GSIB bank for the same set of loans.”

“Frankly, it’s not right, and it’s un-American,” he said.