Jamie Dimon on the Biggest Risks Facing the Global Economy — WSJ Leadership Institute

[00:00:00] Speaker 1: I've seen people when they get a big job, their insecurity comes out, they start to cover up, you gotta, don't embarrass the boss, the people who work for them is, you know, make the boss happy. The job of no one at this company is to make me happy. The job of this company is to do the right thing for the company, the clients, the community, and the country. [00:00:23] Speaker 2: Thank you all for being here. Thanks to all the members of the Wall Street Journal CEO Council who are here. It's warming to see you all, and thank you, Jamie, for hosting us. Thrilled to be here. Thank you. Nice digs you have here. [00:00:37] Speaker 1: We earned it. Well, I was, the bankers earned it. [00:00:41] Speaker 2: It took care of our people. I mean, here, you're at the top of the world here, you know, your most important financial institution, tallest building in the city, most important city in the world. Does it ever go to your head? [00:00:53] Speaker 1: Not really. First of all, I am thrilled to be here. I hope you all know it's the American flag when you come in, blowing in the wind. I salute that every morning. You're not joking. I'm not joking, no. And it reminds me of the values that created this great country of ours that should be celebrated and taught everywhere. Freedom of speech, freedom of religion, freedom of enterprise. A lot of these entrepreneurs, Mike was talking about, are from other countries and how deeply they love this country, and they came here to be, to actually have the American dream, the American principles, and that is kind of foundational, even to SRI, by the way. [00:01:29] Speaker 2: I want to talk about SRI, but this is a monument to the American dream in some ways. Is that the, I mean, you must feel some real emotion when you come in here. [00:01:40] Speaker 1: And I just got back from London last night, and every morning I walk in, I just, I do. This is a labor of love. Remember, we're paper pushers. You know, we move paper around, and we move electrons around, and money, and stuff like that. But the whole management team worked on this very building, the entryway, the spaces, the dining rooms, the first eight floors are trading floors that trade, you know, $2 trillion, $3 trillion a day with the securities. There are security floors. There's a Morgan's Pub on 13, which we, I insisted they put in, we actually get Guinness beer after 4 o'clock. Pretty nice bar on 57. There's a Patriot, we call it the Patriot's Bar. There are flags up there from the USS Constitution, which is the Revolutionary War boat. One of the flags is from the top of Point of the Hock, June 6th, 1944. And there's a picture up there. The range is still taking prisoners. There are flags from Apollo missions, from Vietnam, from Revolutionary War. A black regiment, it was the 25th Regiment, I think was one of the first fighting regiments that actually helped take Richmond. It's very touching. And the first event I did here was up there having, you know, cocktails for the veterans. That work in this building. And I'm telling you, there are a lot of tears in those eyes. You know, both being thanked. They came from, of all ages. And it was extraordinary. [00:02:59] Speaker 2: Well, it leads right into the Security and Resilience Initiative, because that is about national security, right? Yep. What do you, you look back at the last year, one year anniversary, what are you most proud of that you've accomplished? [00:03:11] Speaker 1: I mean, this is, first of all, it's really lifted up our people. I mean, you know, Mike said it was for the purpose. And we have a couple of guys here, proprietary partners of mine, and they heard about it and said, I'm coming back. And advanced Matt Marcus over there, advanced manufacturing. But it's also been an amazing learning thing. It's been far more than we would have expected. Other companies are doing it. I think this is great. The purpose is security and resiliency. And it's, the breadth has just gotten bigger. We'll be, we'll blow way past that trillion and a half dollars. I don't, I know Todd Combs is not here, but I see a bunch of his partners. That 10 billion is direct investing in security and resiliency. It also opened up a lot of other issues. You know, one of the, we go to a lot of these vendors that Mike was talking about. Those companies have tons of vendors, the prime contactors, everyone in this space. A lot of those vendors need help. And often it's not capital. They need the skills. So, you know, the American dream is kind of another side of this part. This is actual security resilience in drones and space and missiles and an advanced manufacturing and pharma and healthcare and grids and all the things that we all know we need. And obviously we should have done some of this before. But the other side is skills and training and small businesses and vendors and other things we can do. [00:04:24] Speaker 2: So some of the stuff, I mean, you're the biggest bank in the country in the world. Some of the stuff is stuff you would have done anyway. Yeah. How do you distinguish what's really new and different? [00:04:33] Speaker 1: So we really, you know, and that came up from the start. And a lot of people didn't want to announce it because of that. And I was like, just stop that crap. Just tell them what you're going to do, why are you going to do it, how are you going to do it, what you hope to accomplish. So when we did the work and they, you know, we have published a little bit about this. It wasn't Boeing. It was Boeing Military Division. You know, it wasn't Exxon or Energy. It was LNG going to Europe because they need it for security. And security is different for every country. So it's 29 industries, you know, around five. But, you know, it's grids and power. It's AI. It's not all AI. It's not AI for consumers. It is some of the AI for military. [00:05:10] Speaker 2: Does it have a different hurdle rate than other things you do? Well, that's a good question. Or how do you think about it? [00:05:15] Speaker 1: Yeah. What I told the board is that, first of all, I'm a patriot and we can do things because we want to. We're patriots. That is probably riskier and lumpier results, but it has this, hopefully, the same commercial outcome. And, you know, and so we are doing things with companies in earlier stage than JPM where we normally do. Like, you know, these companies talk about, you know, death value. They need money. They need to build a plant to satisfy the contract, but they don't have the contract. And they can't get the contract unless they can prove they can build a plant. And so, you know, trying to bridge some of that. So some of this stuff we would have done anyway is not risky, but some is slightly riskier. And I, it's okay. We used to take a risk. We're quite good at it. We take it around the world. And then we've extended it, very importantly, to Europe. So think of Germany, Italy, France, UK, Poland, and then Australia, Japan, South Korea, you know, other countries. They're basically allies of the United States. They all need it. And we've set up, we have an advisory group that has really worked, including Jeff Bezos and Michael Dell and Condi Rice and Bob Gates. And Condi's doing something on the skills side. And Paul Nagasone is doing stuff, a former general on the cyber side, which he ran. So everyone's getting involved. And the learnings are really high. Like you mentioned the 4,500 companies. So we're, and we've hired a lot of bankers to cover them both in SRI and outside of SRI. Policy's a big deal. How do you get the government to make purchases bigger? How do you get, we did research, and this is great research on the shipbuilding ecosystem, the chipbuilding ecosystem, the pharma ecosystem. And these ecosystems are far more complicated than build a ship. Like, you know, the shipbuilding one, you need chemicals from Japan, stuff from Korea, the ASML etching equipment from Netherlands. You have these extensive supply chains. You just can't move stuff. [00:07:10] Speaker 2: But, you know, it almost, when you talk about it, it almost sounds like a wartime industrial policy. I mean, first of all, is that what it is? And second, does J.P. Morgan belong in the wartime industrial policy space? [00:07:24] Speaker 1: Yeah, I'm a patriot. And I wouldn't call it wartime industrial policy. But I'd say we should have been doing this anyway. And my view... You were early. Yeah. You were early. Well, if you read my chairman's letter, last year I spoke about some of it. And actually, General George came to see me. He actually came to see me today. And people like General Milley, who we do work with, and some other generals. But it's really, Randy George said, we need help on educating with these ecosystems, financing these ecosystems, getting Congress to have different ways to authorize purchasing, which they have done, by the way. They're moving very quickly now. Whether it all works or not isn't the point. They need to move quickly. And then when you look at our weaknesses on rare earths, and these are the ones you vote, rare earths. We rely on China for... And I'm not... China's not an enemy. I wouldn't rely on anyone for all of our rare earths. I wouldn't rely... I mean, we know at J.P. Morgan, we've got multiple supply chains. And it's true for semiconductors. It's true for active pharmaceutical ingredients. It's true for some of this advanced manufacturing that we sent out. You know, this is an amazing... You know how much money we save by outsourcing rare earths? Almost nothing. $500 million or some number like that. You know, but it made sense at the time. You know, you're saving five cents a magnet, which could be $10 a car. You know, people are trying to reduce costs. But we also, when we did that, we lost the ability to advance the IP. And so in advanced manufacturing, it isn't just that you outsource it to a cheaper place. You actually lost the ability. That IP was improved since we outsourced it 10 years ago. And to me, you know, if you look at it, I like to do post-mortems and be self-critical. We should have done this way before. China did. China was very strategic. All these years, they've been planning for, you know, straights or Hormuz. Why didn't we do it? We're just like a bunch of gangly teenagers who want to have a beer. You know, like... At the Patriots bar. At the Patriots bar. And we just didn't get... Some people knew there were warnings. There was... We just didn't think it all through at the time. And the world was, you know, for a long time, everyone's doing stuff and we're doing fine. So... But the fact is, forget all that. You know, my view is roll up your sleeves and get to work. And that's what this is. Yeah. Yeah. [00:09:32] Speaker 2: Isn't it also because the world has become a more dangerous place? I mean, we've got two wars going on. Neither of them seems to end. We've got this great superpower rivalry going on. The institutions that were created after World War II to create peace and prosperity are all deteriorating. How worried are you about America's place in the world and the state of the world? [00:09:53] Speaker 1: Yeah. So, absolutely, it's more urgent today than five years ago, than 10 years ago, than 20 years ago. Absolutely. But when Ukraine was invaded, you know, I wrote a little thing in my chairman's letter. I like to write my chairman's letter. I know they're long to read sometimes. But that the world didn't change that day. We were just reminded the world's real politic. And that peace was never at, always at hand. And bad people do bad things. And we weren't prepared. So, I've been reading that alarm bell kind of since then. Of course, in Ukraine, you've seen, it's gotten worse and worse. We've seen how quickly this technology changes. And, you know, our military is kind of on it. Now, you travel around, you actually see enormous progress very quickly in space and drones and supersonic missiles and small nuclear reactors. And government is trying to quickly allow things to take place. But absolutely, the urgency today, it is time urgent. We never should have been here. Maybe more time urgent than it was 10 years ago. But I don't, again, I know that. And I'm not the kind of person I like to put my head in the, you know, put my head in this and cry about, wake up when I come in every day, roll up my sleeves and get to work. That's it. You can, you know, is the urgency on a scale of one to 10, you know, five or seven? It doesn't matter to me. We should have done it anyway. It is far worse today. And, yes, the American, the American, you know, America still has 40 military alliances, you know, trade agreements with, I think, 20 different countries. You know, we're still the leader of the world. And they still rely on us. And this is why we're also expanding this to the rest of the world. And so, you know, you can criticize some of the actions that we've done. But it is critical, in my view, to keep the Western world together properly, economically and militarily. [00:11:33] Speaker 2: What's the biggest risk you see out there right now? [00:11:37] Speaker 1: Well, there's two I'll mention. One is these wars develop in a way that you don't expect and they can cause huge disruption to populations, to who allies with who. And obviously, it's the world economy. And the second is cyber. You know, we've always known about cyber. And obviously, cyber, again, I wrote about cyber this year. I said, and I meant it, it's our biggest risk. OK, and that was a couple of weeks before mythos. And now it is our biggest risk by far. And I put that. Now, we always had cyber on the list for this thing. But you guys have seen even, like, these fiber cables. So a lot of your companies move a tremendous amount of data across these fiber cables. They're all vulnerable. Russia cut some in the Baltic Sea. You can cut off a whole country and that traffic cannot be replaced by satellites. Yeah. Yeah. And some of these things are asymmetrics. Or some, yeah, if they do that, you can do it back. But some aren't, as you see with the drone warfare. [00:12:35] Speaker 2: I want to come back to cybersecurity in a minute. But I wanted to ask you first, do you, because you are now so deep into policy and national security, are you working closely with the administration on this? [00:12:47] Speaker 1: I wouldn't say closely. What we do is we deal, though, these guys, I mean, we deal a lot with all the government agencies. And we try to help them to the extent we can. And they're not going to always support us or vice versa. But we are deeply there. And, yeah, we're going to, that's always been true. We try to help our government and governments around the world, you know, get their jobs done. And we have to deal with the politics of that. But absolutely, we're trying to do it. [00:13:10] Speaker 2: But, you know, some people raise the political piece of it. I mean, in 2020, when George Floyd was killed, you stepped up and said, we're going to devote $30 billion to racial equity. A couple of years later, you stepped up and said, we're going to devote $2.5 trillion to fighting the climate crisis. Are those things driven in part by changing political trends? [00:13:31] Speaker 1: Well, no. George Floyd was murdered. I wouldn't put that in the political trend category. And I think, again, you've got to take everything in context. I think it's good that the world said that stuff has got to end. We can do more for the black community. We still reach out to the black community, the gay community, the female community, the Hispanic community, every community. That hasn't changed. The law has changed how you do it. I think some people overdid it and some didn't. And the climate stuff, we were always very clear. You know, we were not, we knew exactly some of the stuff was stupid. Some were smart. And that we can help the smart and not the stupid. I think we've been very good on that. And so I think climate's a problem. I think, you know what's going to solve it? It wasn't, our policies were terrible. You know, when we wrote about it, we talked about it, even, you know, some of these things, I said, if you don't have proper government policy and proper innovation, it is not fixable with the current stuff we have. And a lot of the stuff we did was counter climate. Like, for example, I think this number may be roughly accurate. Our CO2 per input to GDP is down 50% or something. Half of that, which was you outsourced dirty stuff to other people. And so people are taking victory laps here, and it didn't do a damn thing for CO2. Just pushing it offshore. Both steel, rare earths, aluminum, just name it. A lot of that was being done by coal over there, and something cleaner here. So I just, and some of these policies, they were thoughtless. They, like a lot of policies, we put in place policies that have the opposite effect. So I think we're going to conquer CO2. I'm not, I still think we should. We can reduce that. I think it's going to be AI that does it. [00:15:05] Speaker 2: But there's clearly value to you to being in line with the current administration. [00:15:10] Speaker 1: We've never been in line with the current administration. We've always tried to help the current administration. And I'm never embarrassed about that. My daughter, years ago, when Trump became president, I went on the, that business council thing, and she wrote me a long letter. Beautiful, elegant, thoughtful, ending with, like, how could you, dad? Ending with the quote from Martin Luther King from the Birmingham jail. And then my other two daughters, my wife, said, ditto. And, like, don't come home for dinner. And I wrote them back a note. I said, well, you know, Julia, you got everything right except for one thing. She said, what's that? I said, the conclusion. Martin Luther King would have gone to the White House every day to further what he thought was the interest of his goals and his values. So the notion when people, people get pushed around by the press, they get pushed around, don't do that. Forget all that. What's the right thing to do? And then do it. And, of course, the press will attack you from the left to the right. So we've always been that way, and we've always tried to support the American government, and the American government, all of them, have attacked us in various ways. And, you know, I'm used to that. And that was true under every president. Try to help them, and they attacked us. [00:16:17] Speaker 2: I'll leave politics in a minute, but, you know, you have built this amazing building here in the middle of New York City, so you must have some kind of a relationship with the new mayor. What do you think? [00:16:27] Speaker 1: Well, we'll see. You know, I've, but I've, my view, I had him here, by the way, and I saluted the flag down. [00:16:32] Speaker 2: Did you take him to the Patriot Bar? [00:16:34] Speaker 1: I didn't. I think I hadn't, I gave him, I didn't do it, but I had someone take him, I think, there. But I saluted the flag when I came in, and I said, you know, Mr. Mayor, I just want you to know that my grandparents, who were Greek immigrants, who didn't finish high school, three of them came here, you know, right after World War I. And I salute that flag every day, and my grandparents came for the same reason your parents came, this country and its freedoms. And I'm quite serious about that. And we spoke, I was very open about it, and I'm not, someone wrote an arc about that, too, Jamie. No, I told him exactly what I think about stuff, including I am against racism of any type, including anti-Jewish, anti-Muslim, anti-gay, anti-whatever you want to call it. And that anti-Semitism is anti-Jewish. Okay, you don't have to like what the Israeli government is doing, I don't like what the Iranian government is doing, I'm not anti-Iranian. And I think people have to be quite clear what they mean by these things. And he listened, we had a nice conversation, and I told him my experience with all CEOs, but it's true for governors and mayors and prime ministers, that good policy gets things done, and that I've seen people grow into the job, they get good people, they attack it, and it's not ideology. Like, our potholes, our crime, our hospitals, our schools, our subways, is not ideology. Getting affordable housing is not ideology. If you confuse ideology with those things, if somehow you have a better moral position, but most of the policies we do around those things don't work. You know, and like take our, and then in the Work Skills Initiative, which in our American Dream Initiative, you know, we've, I think we spend a trillion dollars in K-12. And we, but we never say, it never happens that it fails in, not everywhere, a lot of your kids go to public schools, they're fine, your schools are fine, don't worry about it. But in a lot of inner cities and rural areas, it fails. Why can't we just not acknowledge, it's not working, it's intergenerational. What can we do to fix it? And there are things to do to fix it. And by the way, it's free. Good policy is free. I think if we can grow our economy 1% more, free. Don't have to raise taxes, don't have to spend more money. [00:18:40] Speaker 2: You need a functioning political system, though, to get to that. [00:18:43] Speaker 1: Yes, and functioning policies. [00:18:44] Speaker 2: And how do we get to that? I mean, we've got an election coming up, but we have, increasingly have a situation where, people of goodwill from both sides can no longer get together and get things done. [00:18:55] Speaker 1: Well, that's been true for most of our history, by the way. Look, my only, again, my view is, if you read history, I love reading history. That's true in a lot of places, and some people get it, some don't. And like, that people need to be involved and to take some responsibility. So people ask, should J.P. Morgan be involved? Yes. You know, we lift up society because we bank city schools, states, hospitals. We do a lot of stuff. We do a lot of philanthropy, mostly to catalyze important stuff. But of course you should want to lift up your society. The Founding Fathers, you know, it's not constitutional, but they always spoke about civic responsibility, and including business civic responsibility. So the thing about business, they should get involved, in my view, like the BRT, but it can't be about your personal thing. It can't be about ethanol taxes or carried interest taxes or, you know, bank regulations. It's got to be about policies that help your country, like President Kennedy said. [00:19:49] Speaker 2: Did you get the BRT to make that change? [00:19:51] Speaker 1: The BRT is very effective, and it's hard. You've got to get involved in all these things. But the BRT has policies around immigration, taxation, regulation, health care, affordable housing, security, work skills initiatives that really would drive a lot of growth in America. And by the way, the other thing is we don't, we don't, you know, Scott Bessett mentioned 3%. I agree with him. We have done 2% for 20 years. Why didn't we ever say we owe our people 3% and we could accomplish it? And I think we could accomplish it with no new spending and no new taxes just by changing, you know, immigration, education, permitting, all these various things you constantly read about. And we think it's funny. Well, it took 12 years to get a permit to build a broken bridge. It's not funny. It's a disgrace. And it's embarrassing the country. It's one of the reasons the American population doesn't trust the effectiveness and confidence of government. And so I think business could play a helpful hand by collaborating with them to fight for what's good for the country with policies that a lot of you already know and understand because we have to deal with it all day long. And, you know, politicians, the good ones need, they want help. You know, and we always, then the press, of course, when you see the press, it's often the people on, I call them the wing nuts, but it's often the people on the sides. You know, there are a lot of people in the middle, senators and congress folks, who actually want to get the policy right. [00:21:12] Speaker 2: Fewer than they used to be. [00:21:14] Speaker 1: You can judge that. I'm not sure. Yeah. I think the press may give too much. You know, the press. I mean, I was with Hakeem Jeffries recently said, you know, DSA is going to be five congressmen. [00:21:25] Speaker 2: Yeah. [00:21:26] Speaker 1: Right. And that's all the time the press spends on it. And I just, you know, immediately tell the truth, the whole truth, but we'll see. But in any event, again, don't cry with spilled milk. Roll up your sleeves and try to help. [00:21:38] Speaker 2: Yeah. [00:21:38] Speaker 1: Because talking about it theoretically doesn't do a damn thing. [00:21:42] Speaker 2: Let's talk a little more about the economy. I mean, what is your analysis of where we are right now in the economy? Obviously, there are a lot of good things going on, but there's some concerns. You see it in the bond market. You see it other places. Yeah. [00:21:55] Speaker 1: So we already talked about the wars. And obviously, that can dramatically affect the economy and a whole bunch of different stuff. So I'll talk about non-the war. I think that creates a huge amount of additional risk and not completely controllable risk or understandable risk because I said things happen you don't expect, particularly in wars. And so, you know, look, the American economy is kind of booming right now. It's good times, you know, corporate profits are way up. And good news. So, and I don't like guessing about the economy. I like looking at the factors that drive it and then you can add probabilities to it. Corporations are not over-leveraged. Consumers are not over-leveraged. Unemployment is really low. You can argue whether the wage is going up enough for the lower end. Probably not. But they have jobs. And that is the single sole most important thing for most people, that they have a job and they go to work. And most people, contrary to what you hear, like their jobs, you know. And what are the negatives? Huge government deficits, which, you know, the best way to reduce it is to have more growth. You know, AI is adding to the growth because it's spending money. It's not, like the way it shows up the economy is not an investment per se, because that's, it's people being hired to build data centers and steel and servers and roads and cement. And that is kind of spending. So, it may be a little inflationary at this point before it may have a deflationary effect. And we don't, and then inflation is just, you know, it's been there for five years, folks. It's sticky. The numbers themselves aren't particularly good. So, I think we should investigate how those numbers are calculated. And I think that some of these future events are inflationary. Ongoing deficits globally, remiliteration of the world, restructuring of trade, health care. You know, immigration, you know, proper immigration would actually, if we allowed, you know, merit-based, proper asylum, you know, more people working, seasonal workers, that actually would grow the economy and reduce inflation. [00:23:45] Speaker 2: But, but, so let's take that the next step then. I mean, you're a student of history. You look closely at it. When you see what's happening with inflation, when you see interest rates going up, when you see the level of investment that's going in data centers, we've seen this sort of thing sort of boom before, and it usually is followed by a bust. [00:24:04] Speaker 1: I don't know. I mean, look, I've, when you read history, that's, you're, you're trying to make it a binary outcome, which is what you guys always do in the press. Life isn't binary, you know, and, and it might be, it sorts itself out. Obviously, it's reasonably concerned. Things are very good. Of course, one day we will have a cycle. So, the notion, and I, I could give you all these reasons why it would be earlier, why it would be later. We will want to have a cycle, and then people attribute that cycle to the one thing or the other thing. [00:24:32] Speaker 2: These people want you to put a date on it if you don't want it. [00:24:34] Speaker 1: No, of course, I can't. And, and, and the way we, the way JP Morgan looks at this is we analyze, to death, all these risks, and we can handle higher rates, lower rates, inflation, stagflation, equity markets down 40%, bond credit spreads gapping out two or three times, and because we want to serve our clients in bad times. We aren't guessing about that, and my, and, and if you and I said, we all sat here, some of us think the probabilities of something bad happening in 27X, some of you might think it's 2X, some of you might think it's going to be 28, eventually there'll be a downturn. Eventually, it'll be driven by a confluence of events that you probably will, that today you can't guess where they are. You can throw stuff on the wall and make believe you know, but, and so we, we're, we're prepared for all of that, so we can serve our companies, so we can serve our communities, so we can serve our country, so we can continue SRI, and those things will continue regardless of the economic environment. [00:25:26] Speaker 2: And where are you on the great debate over AI safety, the 10% chance that it's the end of, uh, end of humanity. [00:25:34] Speaker 1: Okay, well, I'm going to be like a broken record here. I think the big picture is AI, we've been using it since 2012, okay, and we have a thousand use cases and risk, fraud, marketing design, note-taking, hedging, customer errors, and I can go on and on and on, and I think it's the tip of the iceberg. I think it literally will, over the years, cure a lot of diseases, some cancers, uh, less people die on the roads, people, things will be taking care of you, you have more robots doing tasks that humans don't want. I think that's all true, and, uh, on the risk side, I think there are real vulnerabilities, uh, and AI, and you've, you've seen them, folks, I don't have to repeat hugging face and this thing and that thing, and, and there are a lot of vulnerable units, so we spent a lot of money in cyber, banks are rather well protected, protected, as are other, but there are whole unprotected industries who are also critical, water, you know, parts of transport, you know, some tech companies, you know, or smaller banks, you know, uh, we all have vendors, and that, and so one of the lessons when these guys go through vendors is, you know, that if those vendors don't have the people to, to double their production to help one of the prime contractors, or if they go down because of a cyber attack, you know, either one could be bad, and yeah, we have huge vulnerabilities, we have set up the, uh, we didn't set up, it was already set up before me, Tom Fanning started the Alliance for Critical Infrastructure. [00:26:56] Speaker 2: But you're now chairing it. [00:26:57] Speaker 1: I'm chairing it, but that's, that's, that's, that's going temporary, I think, I don't care who chairs it, I hear about the effort, and, and Chuck Robbins is doing a lot of heavy lifting, Jane Frazier and all that, 50 big companies by industry, and we're starting, we're, we're already doing vetting and clearing houses of open source code, uh, certain policy issues, uh, and we have to disseminate that information, it's got to be done by industry at one point, and this, this is, this is, uh, a new, it would try to double down the effort, we have an extremely good board, it'll morph over time, and we'll be adding industries and companies, because, you know, I get a lot of calls, why not us, well, I got to start something, we had to start, so we're starting this way, but over time, as we get more manpower and more capability, we're going to try to probably add industries and, uh, companies, and then, I also think, take the banks, we should, obviously, work among ourselves, make sure our vulnerabilities cross industry, like, our vulnerabilities to telecom and water, uh, uh, uh, uh, our, our main vendors, think of Swift chips and Fedwire, and I give you thousands of those big ones, uh, but also smaller ones, and then, you know, help our brethren, you know, uh, smaller banks and related, who have different vulnerabilities, different vendors, and that could be just training, uh, all these various things about, and a lot of things everyone should be doing today, today, they shouldn't, you should go back, if you haven't done it, and start today, network segmentation, uh, identity access management, uh, uh, use the, use the, use the most powerful AI models, you have to look for these vulnerabilities, you will find 20% of them, learn how to patch very quickly, uh, uh, uh, make it part of your, and make it part of your management meetings, so that if you're running this part of the company, you know the ones you need to fix, you know the ones you need to fix, you know the ones you need to fix, there are things people should start today to get ready to, you know, prepare for cyber, but it is, it is really vulnerable, really vulnerable, and I, I don't think anyone disputes that, by the way, that, you know, you could dispute, again, on the scale of one to ten, is it ten, you know, extinction, or eight and a half, Where would you put it? I, I don't know, I, my view is, It's rising. It, well, it's definitely rising, and it will change over time, so this, the efforts you're making here is to, like, build the muscles to combat the bad guys, and then the bad guys could be states, terrorists, insiders who don't like your company, ransomware, criminals, they're all, and they all like to do different things, and so, we need to muscle, and then what, you know, maybe one day, you talk to some of the big AI, AI guys, and LLM guys, they say, we also are going to try to build models that are good defense, so you have these thousand agents, you know, they're little persistent agents that try to attack you now, you could build, maybe you have an AI system that, you know, offsets every, you know, every agent that's trying to attack you, it kills it. Yeah. We'll see. [00:29:37] Speaker 2: I, I, I want to talk about leadership because that's why the Wall Street Journal Leadership Institute exists, and that's why a lot of our CEO Council members are here. We've been talking about it, of course, everything you're doing in SRI is part of your approach to leadership, but you've been doing this 20 years now, running, running this bank. Not many people make it for 20 years. I guess Warren Buffett did, Jensen Wong. What, to what do you attribute your success? How have you been able to do this? [00:30:03] Speaker 1: Yeah, I, I, look, I don't really know, and I've seen a lot of very successful people, a lot of different things. You know, to me, I'll tell you the important things. You got, I work hard, you know, and I'm, like, relentless. The people in this room know that I'm just, I just don't let go, and I love it. You know, it's like, and I have the energy. When I don't have the energy, I shouldn't be doing it anymore. It has purpose for me. You know, when I grew up, you had a, the values were work hard, have purpose. Everyone's got a different set of skills, so, or different sets of, types of skills. And what's your, what's yours? I think there's, everyone's got a different degree. So it's a, you all have different mix of skills. And I've seen people, when they get a big job, their insecurity comes out. They start to cover up. You gotta, they don't embarrass the boss. The people who work for them is, you know, make the boss happy. The job of, no one at this company is to make me happy. The job at this company is to do the right thing for the company, the clients, the community, and the country. And I could see the difference when they talk to me. You know, I, I'm not interested in you making me happy. You know, sometimes actually, but, but, but so people's, but here's the things that are important. People's analytical skills. But I think the real one for like leadership is the EQ, various EQs. And EQs are a funny one, like do people trust you? Are, and a lot of people aren't. People just don't like having them in their room. They bullshit. They, they're always looking around. Who's saying what to who? How can they get away with it? Do you, do you have grit to do the right thing when it's tough? You know, and do you deal with a tough issue? Do you put the dead cats on the table? Uh, do you, um, uh, do you have a little heart? You know, like people don't want to work for people who are assholes or treat, mistreat people. And you know, I look, I've made that mistake where you promote the guy who's the best or lady who's the best trader, best banker. And they're a disaster, you know, because they didn't have these other skills. And then some people get in these jobs and all of a sudden, all these other skills come to light. How they manage people. I take care of conflict situations. Everyone wants to call them up and everyone wants them part of the team. And, uh, and then I'll, I'll give you a heart. I mean, when I first came to JP Morgan, they, you know, they all had read the stories about me, tough on expenses and which I am. I hate waste. But waste is not tough on expenses. You know, certain expenses are good expenses. And, but they had outsourced all the guards and janitors and the head of the SEIU wanted to come see me to complain, I guess, about that. They didn't want me to do it. I saw him. They thought he'd be taping me and use it against me somehow. Uh, and he said, you outsourced the janitors, the same person who comes back to the same job at the same pay. The reason you guys did it is because the outsourced people took your benefits package for, but they have a family that's cost $30,000. That's medical, predominantly medical and, uh, retirement. And they cut it in half. That saved $15,000. They let you have seven and a half of that. And they took seven and a half of the services provided. And I went to see the person who did it. I said, never do something like that again. That we're not going to build JP Morgan a great company off the back floor of guards and janitors. That is not cost cutting. And, and, and I said, I want them back by the end of the week. I don't want any negotiation. I don't want to talk about it. I don't care what consultants told you. I don't care what other companies do. And, you know, hard. I've, you know, those things matter to people. And so, um, then they let people do their jobs. And, you know, it's a, it's a very, but the other one is teamwork. And, you know, you people love sports or sports is clarity, but you know, when you see a team and they're playing together, they don't have to be friends, by the way, but they play properly. Remember the Spanish team passing, taking their time, thinking about moving together, you know, and you all know in any, a basketball team or a football team or that it's a beautiful thing to watch. Well, business is the same. It lacks two things. Okay. One is the clarity. You know, BSers could BS endlessly. So you don't have the, did they win or lose? Now you, we know, we know that person's a BSer, but we don't do anything back with a good salesman or something like that. And, and, uh, but it is the same thing when you see your company that works as a team. They support each other. They help each other. They give them a swift kick in the ass sometimes. Everyone does their part. Everyone does their homework. Everyone shows up. You know, everyone reads the tapes. Uh, you know, every, and that, and then you have leaders like, you know, Peyton Manning, or, you know, I always loved Peyton Manning and, uh, Tom Brady and, you know, come here. And they, we have a conversation about leaders. They, they go through all this and they both will say the same thing. I didn't have a very good arm and I couldn't run. You know, two of the greatest quarterbacks of all times, but they talk about the work ethic and caring about the front line. You know, Tom Brady took less money so he could pay the front line more money. You know, and there's things like that that people don't focus on, but that's team. And, and I think sports, I think a big company or a small, you would have the same bad behavior in a small company too, by the way. So. [00:34:44] Speaker 2: Well, you're a Ted Lasso fan too. Yeah. [00:34:46] Speaker 1: I love Ted Lasso. [00:34:47] Speaker 2: Yeah. What, what have you learned from Ted Lasso? [00:34:49] Speaker 1: Yeah. He, first of all, it's funny, but, uh, it's, he comes in and he's, he doesn't know anything about football. Uh, and he's just, he's just gracious and, but he's, he's working to people. You know, their insecurities, their bad behavior. Uh, their work ethic, and he's getting them to function as a team. And he's not arrogant. He's not, you know, he's, he always approaches things in a, not a humorous way, just an easy way to try to explain it. He's patient with people, but he wants to have a winning team. And so, and it's that. It's just the psychology of how he's working that all the time, you know, to create that kind of, uh, atmosphere. And that's what I've seen that in corporate America. Some terrible companies, I can't name them, who get a new CEO and they just go about fixing that. You know, because most of these companies have huge capabilities and IP and great people. And a lot of big companies, you know, they're political and bureaucratic. You know, all that, but the people would like to get out of that. Most of them, you know, and, and the, some of the bad people want to keep it. They're like autocrats. They want to keep it suppressed because they benefit. And the good leader over time, freeze it out, move some of the bad ones and the play starts to shine, you know, and it can take some time because I would say these bullshit has been doing for 25 years and they're usually pretty good at it. It's hard to notice in real time. [00:36:05] Speaker 2: And the reason you're so much fun to interview is because you say exactly what's on your mind. And I think it's only recently that I realized that's not just a personal trait. That's a management tactic on your part. You say what's on your mind, but you expect everybody else to do the same thing. Yeah. [00:36:20] Speaker 1: So if CEOs are saying stuff like how great they are, something like that, the whole company hears it and, and they start, start playing to it. And they, companies know when you aren't doing a good job. And they would, and so I say sometimes with this, we're not doing this particularly well, because I want everyone to know. I'm not pointing the finger to people not doing a good job. I think we should all help them do a better job. But to, to BS about it, you, you, you will, you will deny your problems and stuff like that. And so. But sure. But just so you know, our people in PR and GR are exceptional. And they do take me through some of the stuff. And they want me to be direct and forth. I just not say it a certain way. [00:36:59] Speaker 2: Well, I, I was going to say, I mean, you're, you're a big personality. There got to, there got to be people who, when they, when you say something, they just say, okay, yes, sir. [00:37:07] Speaker 1: The thing they say the most, and I'm walking up on stage, is they say, no cursing. Press this here. Be a statesman. Single decision. I have to remember that. [00:37:18] Speaker 2: Okay. Some quick ones. Single decision you're most proud of over the last 20 years. Oh. [00:37:23] Speaker ?: I mean, there's none. [00:37:24] Speaker 1: I mean, just to help them build this great company. I mean, the, I mean, I think it was hard to merge bank one and JP Morgan. I mean, that was a big deal for both parties. Yeah. Biggest mistake over the last 20 years. It's always the same nature. I mean, if I made a list, it's always people mistakes, where, when I made that mistake, I tortured our people. And it takes a while to figure it out. The torture goes on for a while. They got to replace them. And that is usually a big setback. You're a big reader. [00:37:52] Speaker 2: What's your favorite book that you've read recently? [00:37:55] Speaker 1: The one I mentioned is the one written by the granddaughter of Ike Eisner about how Ike led. I've read a lot of military books that General Milley gives me. I read a lot of stuff. But that one, she, and it's very good. She actually goes through how he handled all the problems he had. And it is, you talk about teamwork. Look what he did. He's got excellent people around him. You know, people who are responsible for making decisions. Get the tough decisions at the table. Get the right people working on it. Have a decision process. It's amazing how many mistakes you avoid and how much respect you earn around the world. And so that, it's just a good, it's both a great history book and a great kind of management learning book. [00:38:34] Speaker 2: CEO other than yourself that you most admire. [00:38:37] Speaker 1: Look, there are lots I admire. I think Doug McMillan did a great job at Walmart. I think Frank Blake did a great job at Home Depot, a great company. I've got obviously guys who built Walmart and Home Depot. But there are tons of them all around the world. And now, you know, I get to meet this, one of the things Mike kind of, where's Mike? One of the things that Mike kind of said is that I meet these companies and we go to Silicon Valley. I've been to, I just met this guy, the Celcium Astro, an Iranian who loves this country, moved here right before the revolution with almost no money. His parents didn't come back, who could have been killed, but they came here 17 years later. He's building satellites, both commercial and military. And it blows you away. You know, you go to Andruil, you go to SpaceX, you go to Impulse Space, you go to Atomic. You go to, whoa. I mean, that innovation machine is extraordinary and very uplifting. And it always reminds me we should be a little more innovative, a little more aggressive and invent a little bit of more stuff. And so, and it's true for the big companies, it's true for the smaller companies. Read the book, Freedom's Forge, about how the American, you know, the arsenal of democracy got turned on after Pearl Harbor. [00:39:45] Speaker 2: You know, we've spent the last 45 minutes talking about national policy. I mean, you can't help but ask, you sure you wouldn't think at some point about running for president? [00:39:55] Speaker 1: Pretty sure. I love what I do. I have a real job. I can affect policy from here. Most people who do that, you know, that's what they wanted their whole life. I have to give this up for quixotic things. You think you couldn't possibly win. You can do it better here. I think I can add a lot of value here to all the, you know, the company, the employees, the country, the free Western democratic world, even China. You know, we do a business in China. I would like to see China do well. And so, India. So, yeah, it uplifts me that we're doing all those things. I am proud of this company does everywhere. So, cities, schools, states, hospitals, SRI, American Dream, just, you know, the innovation economy, which we did before SRI. Yeah. I love that. I love to get involved in the policy and things like that. So, I couldn't possibly win a primary. [00:40:39] Speaker 2: So, thank you so much. Great time. [00:40:43] Speaker 1: Thank you. Really appreciate it. [00:40:45] Speaker ?: Thank you.