JPMorgan Chase chief executive Jamie Dimon is rarely without an opinion on...well anything. And the leader of the nation’s largest bank was true to form speaking at a Council on Foreign Relations event on Wednesday.
Dimon, who has crusaded against increased regulation on Wall Street, said the current regulatory environment has created a lot of confusion with “overlapping jurisdictions, no way to adjudicate disputes.”
“When people make mistakes, they’re attacked by 17 different agencies as opposed to the old days it would be just the one that’s responsible” for oversight of the company, he said. “We need good policy: clarity, simplicity.”
Dimon anticipates that overhead costs from new domestic and international regulations will hit more than $1 billion a year. A bank of JPMorgan’s size can easily absorb such costs, but Dimon said smaller institutions will struggle to contend with compliance expenses.
On the economy...
In what could only be described as economic cheerleading, Dimon stressed that the country is not in decline, but remains a world power with the “widest, deepest, most transparent” capital markets, immense innovation and work ethic.
Corporations, small businesses, consumer and the housing market are all in better shape, Dimon said. The problem, he said, is the uncertainty around taxes, policy and fiscal cliff is “a huge wet blanket” on an otherwise improving economy.
“We have this constant anti-business, not just sentiment, but regulatory, attorney generals...We’re shooting ourselves in the foot,” he said. “Get rid of that wet blanket and this thing will take off.”
Asked whether he believes the bond markets will move against the U.S., Dimon said it is simply a matter of when, as the country “can’t borrow indefinitely.”
“We are going to have fiscal discipline. It will either be imposed on us or we’re do the right thing and do it ourselves the right way,” he said. Had Congress acted on the recommendations of the Simpson-Bowles deficit commission, Dimon insisted “this economy would have been booming.”
“It would have shown that we have the ability. America knows the way, we don’t have the will,” he said. The deficit commission’s budget plan would have created “a more efficient tax system, much more certainty among a whole bunch of policy. It’s still doable. We need the leaders to say ‘we are going to do it.’ ”
On ‘London Whale’ trading loss...
In one of his last visits to Washington, Dimon faced a barrage of questions from members of Congress about JPMorgan’s $6 billion “London Whale” trading loss in the spring. While Dimon remains contrite about the loss, he insists lawmakers overreacted.
“We made a stupid error,” he said. “Businesses make mistakes, they learn from it and get better. Only when I come to Washington do people act like making a mistake should never happen. Only with academics and politicians is it not allowed.”
On Bear Stearns...
JPMorgan is still contending with lawsuits and write-downs stemming from its acquisition of beleaguered Wall Street giant Bear Stearns. Dimon said JPMorgan has lost upwards of $10 billion between all the litigation and unwinding Bear’s troubled business.
New York’s attorney general last week filed a civil lawsuit to hold the bank accountable for allegations that Bear Stearns deceived investors buying mortgage-backed securities.
“Would I have done Bear Stearns again knowing what I know today? It’s real close,” he said. “What I know today is if they called me again to do something like that again, I couldn’t do it, my board wouldn’t allow me.”