Following a
tumultuous month for banks
worldwide during the 2008
financial crisis, it was Jamie Dimon,
along with the other bankers
that really steered
this economy through what we saw.
He led the rescue of Bear Stearns
and Washington Mutual,
helped avert
a total collapse of the country's
financial system.
So I asked him
why did we just see two more banks fail?
Could it have been avoided
What we do know is that
regulators told Silicon Valley Bank
at least six times,
you've got a problem
and your vulnerabilities,
you need to fix them.
Because of a law change.
Four years ago,
they didn't have to fix them.
They didn't.
That was just a recommendation.
They didn't fix those vulnerabilities.
I don't think it has to do
with law change.
They should have fixed it.
The regulation forced it. Yes.
So let me ask you this question,
because the regulators can't force it.
Should the public know
when banks like that
are warned multiple times?
Or is the risk too great
that then there's a run on the bank?
If you wave a flag and say,
this bank has an issue.
So you may know more than I do about it
because I didn't read
all those regulatory reports down.
But my view is
the regulators could have forced it.
If my regulators called me up
and said,
we do not like X
and you have to change it,
I would change it.
You would
There was no law change
that made that not possible.
There is a 20, 21 regulation change
that would said that
this was just guidance.
So you're saying it wasn't just guidance?
I have just guidance, too.
But when they told me I have to do it,
I will do it. I'm doing it, yes.
So let's talk about regulation.
You say better
regulation would not have prevented.
No, no, it would have. So what's better?
I think, again,
we have a liquidity discount Windows.
We have mortgage laws.
We've got capital laws.
We've got TLAC laws.
We've got
how you can use the discount window.
There are 100 rules.
I'm saying
thoughtfully adjust
the mix of how you do those.
Make a bit of changes
if you have uninsured deposits.
But that means held to maturity.
Should you have debt issued,
which are the supervisors
for something
you're not statutorily, not voluntarily.
And I think you can make a lot of change
or improve the system.
But that's always true in any system.
I've never seen it not be true.
Write in your annual letter
about what
you call your word Whack-A-Mole.
You seem to like that
word and politically
motivated responses
to the banking crisis. Like what?
Well, no.
I think very often
when it comes to regulations you have
this is the problem.
They try to fix that,
but it often is unintended consequences.
If you want healthy regional banks,
particularly banks.
You should also listen to them
about what excess cost us
their ability to compete.
You know, what extra
high cost debt does to it
and and have a thoughtful conversation
about what are the things we can do to
to make it easier for you
and make the system safer.
I believe that that's doable.
It's not doable without the conversation
and without the analysis.
I was reading some things
you said in 2008,
and this is in the middle of the crisis.
You just acquired
Bear Stearns in a fire sale
trying to stabilize the banking system.
And then you said
if you don't worry in this business,
you're crazy.
What are you most worried about right now
in these two things?
Well, I think all this
quantitative tightening,
the effect it has on long term rates,
inflation, higher for longer.
That's kind of tied going out.
So even when Bear Stearns went down,
you think other people have seen that
and said,
I have too much leverage,
too much mortgage debt, too much this
and made some changes.
Lehman went down six months later.
I think they might have been able
to fix that in the meantime.
So that's a little bit
of a warning to people.
But I think this war in Ukraine, well,
I think that is changing
everything we think about the world,
how we should think about
safety and security,
even around food, energy.
It's changing economic relationship.
Is right,
really in the relation with us and China.
That is the most important thing.
I mean, if you want to have a free
and democratic Western world
and an American century
in the next hundred century,
that's what we've got to focus on.
You said last year on that front,
the autocratic world thinks
that the Western world is a little lazy
and incompetent
and there's
a little bit of truth to that.
Is that still how you see it?
Yeah,
I think, you know,
I think we do
a lot of things
that we're in great position.
So, you know, for the American public,
we have food,
water, energy,
with the most prosperous nation
the world's ever seen. That's still true.
The most innovative.
Just go to Atlanta,
go to not some people.
These are Silicon Valley,
but in L.A., too.
It's in New York. It's in Brooklyn.
You know, it's all over the place.
We have the GDP
per person is $70,000
plus Chinese is 15,000.
They import
10 million barrels of oil a day.
They don't have
the Atlantic in the Pacific.
They have a very complicated
neighborhood.
You know, they're angry.
Their neighbors, we're
all starting to rearm.
We've got a great hand on the other hand.
We haven't done a particularly good job
taking care of our lower paid
citizens or inner city schools,
immigration, taxation.
I think people should pay their taxes.
Litigation which, you know,
we of course, 1% of GDP.
And if it was
if it created more fairness in life,
I'd say I was good.
But is capricious, arbitrary, slow,
you know,
and so I can go on and on
about mortgages affordable?
You worry about affordable housing.
You know, we all agree with that.
But very often the problem is affordable
housing isn't capital.
It's local zoning. Laws.
So if America
just got out of its own way,
I think we can grow 3% a year.
Are you worried about how close
Iran, Russia and China
are to one another?
Right now and are getting to one another?
Do you think about that?
You're a student of history.
I mean, if you were going to ally
with the Western world,
America and Europe
and Western World
War you're going to ally with
Iran and Russia. I mean, please.
Am I worried?
Not really. That doesn't worry you.
No worries.
Some of our top generals. Okay.
You said military. Yes.
You should worry about Japan.
But I just told you what a great hand
America has seen with kind of Europe.
What we should be doing
is our making sure
we're the allies, not just militarily
but economically,
strategically, diplomacy,
development, finance.
You know,
we have the rest of the world
want to join us.
So if you're India,
would you rather be part of that group?
A part of the Western world?
Are we doing enough
to entice or not enough? No.
I think,
you know, Bob
Gates in his book,
I actually called The Symphony of Powers.
I like that
said the Symphony includes diplomacy,
development, finance,
you having business
involved in helping develop,
you know, Africa,
Latin America, parts of Asia.
I think we could do a far better job
courting that as a policy.
I think, by the way,
the administration thinks that, too.
And the other thing,
you can't take trade off the table.
So the first thing we do
is we take trade off the table
from the start.
No trade may be the most important thing
for these countries.
And while there are legitimate
complaints about trade,
we can do it better. We can do it right.
All right.
And we should be very thoughtful
about it.
Should the FDIC insure
more than $250,000?
Because I think
a lot of people feel right
now, after what we've seen, that
every deposit is just insured
with no ceiling.
You know, I think probably.
But it goes back to my issue
about regulations.
If you do this,
you don't need to do that.
If you do this,
you don't need to do that.
If you do them both, you can hurt
So just be very thoughtful.
We probably we should raise the deposit.
I don't know yet.
I mean, again,
you got to do the analysis in that.
What about
I think that would help community banks.
It would help raise it.
Okay. So final question on that.
Should the banks like yours, the big guys
with the most assets
that have an implicit guarantee
that you're essentially
not going to fail,
pay a higher percentage
in the deposit insurance?
Oh, God, I don't know, aggressive.
I'll leave that to everybody.
You you've been on that?
No. You guys should pay more.
If we were too big to fail,
by the way,
our bonds wouldn't
trade the way they tried
Just so you know.
And you were in the markets and so.
Okay, talk about the economy.
You wrote a lot about this
in your annual letter.
Has this banking crisis,
even though you think it's almost over,
which I'm really glad to hear
though, increase
chances of a recession here. Yes.
But I look at like it's not definitive.
It's just like
another weight on the scale.
And think of it
as you know,
people are just like raising
rates on a 50 basis points
or something like that.
We are seeing people reduce
lending a little bit,
cut back a little bit,
pull back a little bit.
It won't necessarily force a recession,
but it is recessionary
recession more likely
because of this banking crisis
from Jamie Dimon.
Not definitive
but another weight on the scale.
Yeah, interesting way of how he's
looking at it.