JPMorgan Chase CEO Jamie Dimon is calling for a broad recommitment to American ideals as his bank faces geopolitical uncertainty, a faltering economy and the revolutionary impact of artificial intelligence.
Dimon, in his annual letter to shareholders, released Monday, noted the country’s 250th anniversary as “the perfect time to rededicate ourselves to the values that have made our great nation freedom, liberty and opportunity.”
“The challenges we all face are significant. The list is long, but at the top are the terrible war and ongoing 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 times of turmoil, we are confident that America will do what it has always done: turn to the values that have defined our singular nation and underpinned our leadership in the free world.”
Dimon, a longtime executive at the world’s largest bank by market capitalization, is among the most vocal U.S. business executives. His annual letter offers not only a review of his company’s performance, but also in-depth perspectives on the global situation.
In Monday’s letter, Dimon highlighted headwinds including global conflicts, persistent inflation, upheaval in private markets and what he called “poor banking regulation.”
Dimon said that while regulations such as those put in place after the 2008 financial crisis “have accomplished some good things … they have also created a fragmented and slow system, with costly, overlapping and excessive rules and regulations – some of which have weakened the financial system and reduced performing lending.”
He specifically cited the negative consequences of capital and liquidity requirements, the current construction of the Federal Reserve 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 banking surcharge, or GSIB – issued by US regulators last month – was “mixed”.
“While it was good 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, some aspects remain frankly absurd,” Dimon said.
The CEO said that with proposed overall surcharges of around 5%, the bank would have to hold “up to 50% more capital for the vast majority of U.S. consumer and business loans compared to a large non-GSIB bank for the same set of loans.”
“Frankly, it’s not right and it’s not American,” he said.
On trade and geopolitics
Dimon identified geopolitical tensions as the main risk facing his bank, namely the wars in Ukraine and Iran and their impacts on global commodities and markets – viewing the war as “the area of uncertainty”.
“The outcome of current geopolitical events may very well be the determining factor in how the future global economic order plays out,” he said. “Then again, that may not be the case.”
He also cited a “realignment of economic relations around the world” caused by U.S. trade policy. US President Donald Trump has made tariffs one of the key policies of his second term, introducing higher tariffs on dozens of trading partners and categories of imports.
“The trade battles are clearly not over and it is to be expected that many countries will analyze how and with whom they should enter into trade agreements,” Dimon said. “While some of these measures are necessary for national security and resilience, which are paramount, it is difficult to predict what the long-term effects will be.”
On private markets
Dimon also discussed recent upheaval in private markets, as fears over loans to software companies spark massive redemption requests from private credit funds.
“Generally speaking, private credit doesn’t tend to have much transparency or rigorous evaluation ‘marks’ of its loans – this increases the chance that people will sell if they think the environment will deteriorate – even if the actual realized losses barely change,” Dimon said.
The executive added that actual losses are already higher than they should be in relation to the environment.
“Regardless of how things play out, it should be expected that at some point insurance regulators will insist on more stringent ratings or reductions, which will likely lead to demands for additional capital,” he said.
On AI
Dimon reiterated Monday that the pace of AI adoption is unlike any previous technology. He said that while its implementation will be “transformational,” it remains to be seen how the AI revolution will unfold.
“Overall, investment in AI is not a speculative bubble; rather, it will bring significant profits. However, at present, we cannot predict the final winners and losers in AI-related industries,” Dimon said.
“We won’t bury our heads in the sand. We will deploy AI, as we deploy all technology, to do a better job for our customers (and our employees),” he wrote.
JPMorgan has been at the forefront of Wall Street firms introducing AI into every level of their businesses. Last year, Derek Waldron, JPMorgan’s chief analytics officer, gave CNBC an early demonstration of how it uses agentic AI to accelerate work and improve outcomes for clients and shareholders.
In February, Dimon said AI was reshaping JPMorgan’s workforce and that the bank had “huge redeployment plans” for employees.
“We focused on some ‘known and expected’ events and some ‘known and unknown’ events,” he said. “But huge technological changes like AI always have second- and third-order effects that can have a profound impact on society. … We should also monitor this type of transformation.”
— CNBC’s Leslie Picker and Ritika Shah contributed to this report.