CNBC Exclusive: CNBC’s Andrew Ross Sorkin Interviews JPMorgan Chase’s Jamie Dimon from CNBC Institutional Investor Delivering Alpha Conference

Published Tue, Sep 12 20176:15 PM EDT

WHEN: Today, Tuesday, September 12th

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Jamie Dimon, JPMorgan Chase Chairman, Chief Executive Officer and President, live from the CNBC Institutional Investor Delivering Alpha conference in New York City on Tuesday, September 12th.

Mandatory credit: CNBC Institutional Investor Delivering Alpha conference.

ANDREW ROSS SORKIN: Our privilege to welcome Jamie Dimon to the stage this afternoon. We have a lot to talk about, about the economy, about the banking business, about Washington, so much more. But I want to start with this, if you'd indulge me.

We've had lots of conversations throughout the day, starting with the Treasury Secretary this morning, and one of the questions that's invariably come up is, what is the possible growth rate, GDP? What's realistic? And -- hold on.

[LAUGHTER]

ANDREW ROSS SORKIN: And we've asked this question. And most people have come in the sort of 2, 2.5% kind of way. You have been an outlier on this. In fact, you've probably been closer to President Donald Trump's number than just about anybody in the business community. Why are you right and everybody else is wrong?

JAMIE DIMON: Welcome, everybody. Pleased to be here. Thank you for the question. I think my general point of view is we're growing at 2% in spite of the bad policy we have. And I made a list, and this is what convinced me. Okay?

We can't build bridges. It takes ten years to get a permit to build a bridge. We're not training our kids in inner city schools. Our corporate tax system is unbelievably uncompetitive, has been that way for years, they're driving capital and brains overseas. Immigration system is driving brains overseas. We should keep all the people who earn advanced degrees and college degrees here. And our work labor force participation just think, one cohort, men 25 to 55, is down 10% from like 30 years ago.

And don't tell me that's the new normal. There's something wrong. 20% of that some people estimate is because of drugs. 80% is -- obviously Republicans will say it's because we have incentives not to work. Maybe incentives are too low to work. But all I've ever said is, if we did things right, we'd be growing 3%. But this growth, by the way, we've had the last eight years, it averaged a little bit less than 2%. It's half of the norm. Okay?

So it's a long recovery. But it's half of what we would've had in a normal recovery. And regulations I also want to put on the list. Forget big banks, because I think it's true for banks. But regulations, small businesses, go ask any small business, okay? Anyone. Ask any of you in this audience, what have regulations done? They're crippling certain businesses. Small business formation in this country, the United States of America, is less than any major country by maybe half a million small businesses.

I make that list and say, don't tell me it's the new normal. It's our policies. That's what's doing it to us, and we should change the policies for the good of all Americans.

And lending, another one I hear, is we haven't affected lending. Absolutely untrue. Okay? Any small business has a hard time, new or small business, has a hard time getting a loan. Existing ones don't. Mortgage lending, I wrote about this, our economists, they did no work. Caused higher cost of mortgaging because of servicing legal requirements and less availability, mostly to young, unemployed immigrant -- self-employed immigrants.

We think mortgages could be $2 trillion higher. Cut that number in half, make it a trillion. That alone at 10% to lending, it would add to growth, business, to the market, drugs, everything -- new homebuilding, new household formation. And you tell me we're not holding ourselves back? The fact is, we are.

And it is what it is. I mean, I can't change it. But I do think that these things are policy issues, and it's not just that's the way it is. Not just that way.

ANDREW ROSS SORKIN: When the new administration came into power, you were relatively optimistic that things were going to get fixed, that a lot of these issues that you're talking about might be tackled. Today, more or less optimistic?

JAMIE DIMON: When you say "optimistic," I don't know, because you all see Washington is a very difficult place. I urge the folks in Washington, we need collaboration, thought analysis, policy, get stuff done. And what was optimistic was that the agenda that the administration came up with, corporate tax reform, infrastructure, regulatory reform, education, work skills, that is part of the right agenda. That's what I was optimistic about. Consumer confidence has gone way up. Business confidence has gone way up. And so it does -- confidence -- so I do think it matters.

Look, with all this stuff we're going through by day -- the odds -- you know, you see the odds of the bookmakers, the odds of successful reforms are coming down like this. But doesn't mean they're not going to try. You had Secretary Mnuchin here. I think you have some very smart people that are try to get some of this stuff done. Look, I'm not an expert in Washington. I don't know if we can get it done. We're going to do our part to try to help get it done.

ANDREW ROSS SORKIN: But you're spending more time in Washington than ever before. There was a piece out last week about the amount of time you're spending in Washington talking to different lawmakers. Are you not more pessimistic yourself about where things stand today?

JAMIE DIMON: I'm not that kind of person, okay? I wake up in the morning and give it my best. I don't guess about optimism, pessimism, stuff like that. I'm going to wake up tomorrow and give it my best. Wake up the next day, give it my best. It is what it is.

If I go to see lawmakers, all my regulars are down there. The OCC, the FCIC. We have forums down there, the Business Roundtable, the Senate Services Roundtable, the ABA, the FSRC, and we obviously get involved in legislation and stuff like that. Being the chair of the Business Roundtable, obviously I'm doing more of that.

The reason I'm doing that is the BRT, which is 200 large companies, a huge positive force in society. It could be a huge positive force for good policy around tax, immigration, infrastructure, trade, work skills initiative.

So the CEOs want to get those things done, too. And they're very important, because it's good for all of America. That's why. Because it'll create jobs, because it'll create more middle wages and wage growth. That's why it's important that business get involved in doing the right thing.

ANDREW ROSS SORKIN: Right. I want to read you something about yourself. "If you're Jamie Dimon, you've always had access." This is Tim Pawlenty, he's CEO of the Financial Services Roundtable. He says, "The difference is now he wants it. He wants to play a role in policy more broadly than just representing his company."

Is that true, and if so, what changed for you?

JAMIE DIMON: Look, I've been with the BRT for 10 or 15 years. When I became the chairman of BRT, obviously I did it for two reasons. I think it's more important than it was before, and I think it's critical to get business involved and get it done right. It will not be done right by government alone. It can't be done right by business alone. So, yes, I think the issues become more important. And I think a lot of businesspeople have said you have to get more involved. You can't advocate all this kind of stuff, you know, without thoughtful policy. And I really believe it. I think if this doesn't get involved, there'll be this huge vacuum.

Actually Secretary Mnuchin is up there saying that business needs to be involved in the right policy and design. It can't be parochial. You don't present yourself to the American public, it's all about your personal thing, your personal regulation, and this is just good for your business. It won't work. If the BRT is a large group which is doing policy which is good for America, obviously it will be good for business.

ANDREW ROSS SORKIN: Okay. You have a seat at the table, by the BRT, but you also had a seat at the table as part of this earlier CEO Council. But you got up from the table after Charlottesville. We heard from Steve Schwarzman earlier today about this subject.

How easy or hard was that for you, and given the various hats that you are now wearing?

JAMIE DIMON: The group disbanded. So it wasn't my decision or anything like that. And I think a lot of people -- I mean, the press makes a huge deal. It's not a big deal. Most presidents of councils, they usually have a limited life. Most presidents, prime ministers anywhere around the world, they ask for help, you should help. That's what your job is. You can't really say, I'm not going to help, a new President of the United States.

I think at one point it became more of a distraction than necessary, that's all. But just stay in the group -- it doesn't mean that the CEOs in the group aren't going to be involved in a way that they can be productively involved.

It just means this group itself may have become more of a negative than a positive.

ANDREW ROSS SORKIN: So you said earlier when you get on the airplane, "the airplane" being America, you'd better be rooting for the success of the pilot.

JAMIE DIMON: Yeah.

ANDREW ROSS SORKIN: Has anything changed with you, by getting off of the plane, to some degree?

JAMIE DIMON: No. Can you imagine me standing in front of an audience like this and saying, I'm not in favor of the President of the United States being successful?

I mean, I would find that -- I would be a traitor. We should try to help the President be successful. That doesn't mean you agree with every policy, doesn't mean you agree with every issue. You'll never -- it's what's called a democracy. You don't just not talk to everyone. You know, I didn't agree with everything President Obama did, but we were always engaged with the government. I'd be engaged with any government. We're engaged with governments around the world. I don't understand the concept that somehow you don't try to help the citizens of that country when you're asked to help.

It doesn't mean you have to agree with everything that the president is saying.

ANDREW ROSS SORKIN: You came out and were relatively critical of the President. How uncomfortable and complicated is it for you to speak your mind in that way, given that most feel you didn't do it until there was a group of them?

JAMIE DIMON: Look, again, I say that people have their own -- sometimes it's personal, and sometimes you're representing your company. But I think most CEOs -- I think a lot of people can say we feel differently about immigration, we feel differently about -- Charlottesville, we feel differently about DACA. Lots feel differently about that. Again, that's a democracy. And I don't think CEOs are afraid to do it.

Generally CEOs aren't public mouthpieces. They don't want to go out and have an opinion every time something happens. It's no, you justify your job. You have to do -- try and do a job running JPMorgan Chase. But sometimes it kind of filters in in a way that you feel like you have to make a statement.

You have 250,000 employees, and we want to make sure that when we say things, we walk the talk, and we do what we say. And, of course, that is around diversity and immigration and things like that.

ANDREW ROSS SORKIN: One of the issues that people have talked about is the idea of deregulation, and that a lot of that can be done without any true legislation. Do you think that JPMorgan or the other businesses that you represent now through the BRT have felt any level of deregulation taking place thus far?

JAMIE DIMON: No. Not financial. And the reason for that is they're still -- they're still just putting the people in the job, the head of the OCC, the Vice Chair, the Fed -- the head of the FDIC hasn't been nominated yet. But I do think that's personnel's policy in some occasions. They still have to go through a process inside the Central Bank or the OCC. It isn't like one person can come in and just automatically make a change. We're not expecting legislative change. It's going to be too hard to change it. And we're not asking for it. And we're not asking for it when they talk about -- you all -- everyone talks about, you know. I, even to some extent binary.

We're not going back to where we were. No one is asking you to go back to where we were. Not the remotest thing. We have more capital, more liquidity. Regulators have -- and take Lehman Brothers. Regulators -- they immediately have two and a half times more capital than they had before. Twice available debt. Derivative contract would be triggered, and the FDIC is the authority to take it over. None of those things were true before. It wouldn't have failed. If it would have failed it would've been madness. With the ease -- and no loss to anyone. The regulators have the authority. So there are a lot of good things done. We've always said, well, we're talking about the calibration. We're talking about the mortgage business. Okay?

That needs to be recalibrated, of course, and keep in mind there's seven regulators involved in that. And Volcker isn't that big a deal to us, but, you know, SLR -- I won't bore you -- Capital, and G-Civic -- things which I think are distorting markets, removing liquidity, make it a little bit harder, make it hard in some small businesses. I mean, some of it's at the examiner level, something like policy issues, and I think those should be calibrated for the country. They're not calibrated for JPMorgan Chase.

If I said to you there's a trillion dollars of IO Capital around, never to be used again, you would say: Well, how much debt do you need for safety and soundness?

That's a good question. Answer the question. Don't just say it is what it is, it's going to be there forever. And so we've tied up a lot of money in capital liquidity that can't be used. And that's just the banking. It's elsewhere, too.

So a lot of companies out there holding more capital in things, and liquidity, because they think they need it. So I just think it's important that people have a rational conversation about what could be changed and would be good or better for growth, would be better for this industry, for that. Does it increase -- make banks any less sound?

I'm not in favor of making banks less sound. I can help your economy make banks more sound, but you've got to balance some of these things.

ANDREW ROSS SORKIN: What did you make -- and I'm sure you looked at it -- of the comment that Janet Yellen made just two weeks ago, to take an implicit shot at the administration and the idea of deregulation and the idea that perhaps -- I think the phrase was that perhaps memories are a little too short?

JAMIE DIMON: Again, I look at that. That's a statement. But to me, the fact that no one's asking to go back there. So if she was just making a statement against a strawman that people want to go back to what they had, that's not true. Unless what you say with JPMorgan, it's not detailed around calibration. She also said, if you read it, at the end of course, some of these things will be looked at and modified a little bit. Okay? Well, both are true. Let's not go back to something that was a problem. Let's make sure we modify and calibrate the things that might be a problem.

Trade finance is way down through this. There's no risk to it. Repo is down through this. Repo, they cleaned up the bad part of repo, and repo reduces some liquidity in the marketplace to valid marketplace players. Not to -- this is not talking about the hedge funds and super-leveraged people. I'm talking about to money market funds, you know, and people who need short-term liquidity. So you've to go through each one and do it, not just make a statement. It's got to be more or less. Calibrate it properly.

ANDREW ROSS SORKIN: As you have -- not that you've had your own mistakes at JPMorgan. To the extent that you've watched those, the more recent mistakes at Wells Fargo, what are the lessons? I think that when we first heard about some of those mistakes, you were somewhat sympathetic to what had happened. Are you still sympathetic?

JAMIE DIMON: I never find joy in problems other people have. And, of course, what we always do, just so you know, is whenever there's a problem, we always study it to make sure we don't have it ourselves; that we didn't miss it. We read other consenters -- we read about lawsuits, because that's just a way of learning. And, you know, look, I think a lot of people, they are class people. They made a mistake. You know, one of the lessons -- and this is a lesson I hope they -- some lessons you learn, and some you relearn. This is a relearn lesson. Sales programs can go awry. It's very important inside the company. You're always looking at how they're incented, what they're doing, what people are actually doing, what got changed, what got modified. And that's just a lesson you always have to think about.

You've probably all seen it in areas many times that sales go. And so that's all that we learned from that.

ANDREW ROSS SORKIN: Okay.

JAMIE DIMON: I want our competitors to do well. I'm not in favor of us doing well because they're not. I'm in favor of doing well because we do a better job.

ANDREW ROSS SORKIN: Maybe this is more complicated. Equifax. You woke up; you saw the news. You're spending a fortune on cybersecurity. And you think what?

JAMIE DIMON: We've been saying this for a long time. Cyber is a big deal.

ANDREW ROSS SORKIN: But you're not surprised it happened at Equifax?

JAMIE DIMON: No, I think there's a much bigger thing. Cyber is a big deal. My guess is things have happened elsewhere and we don't even know about it. Okay? And that everyone's got to protect themselves from cyber. It's a hard thing to do. I mean, when you look at the multiple systems, instances of software and access points, ending points, it's hard to do.

So, you know, Equifax -- and I won't go into detail, but in any problem like this, you look at what happened. Could they -- the crooks find some way in that is hard to capture, or should they have done things very differently, and they knew about it and they didn't?

You know, if you knew about it and you didn't, it's very different than they found a backdoor that's hard to do. Sometimes those flaws come from third parties. You've got to go through each one. And obviously they're going to go through it. And we're obviously in contact with them. My view is always let's work with the customer first and make sure they're protected. And, you know, with the Equifax thing, JPMorgan is going to be fine. You know, it may cost a little bit of money, but it's not going to be anything material.

ANDREW ROSS SORKIN: What did you think of the way they responded to it?

JAMIE DIMON: I'm going to defer comment until I know more facts.

ANDREW ROSS SORKIN: Well, when you look at a situation like that, and you can take it off of Equifax, but do you say to yourself, okay, they're at fault or they're the victim? Because either way, they're going to be the victim of something.

JAMIE DIMON: Right. But, look, in all these things, there are -- you know, if you are contacted by a major vendor of software, someone calls you and says, "By the way, we found a flaw, you have to update your software," and they say, "We got it," and they didn't want to do it to save half a million bucks, that isn't -- yes, they're a victim. But that's like, you know, me not putting a code on a vault in a thing, okay? You need the vault to be proper.

So it depends what happened and how it happened. They're always the victim, but whether they could've or should've. Their obligation -- driving drunk is different than having an accident. Having an accident because you're texting is very different than having an accident because you had a small fit of some sort.

So there's always an anatomy to a problem. It's a lot of detail, and we're going to go through it all. I'm sure they're almost relative now.

ANDREW ROSS SORKIN: Policy perspective, what should the liability be? For any company that has a breach like this?

JAMIE DIMON: Again, that is an -- well, my attitude is going to be if the breach is because of something you did, you're going to pay. Okay?

And so we have tons of systems in place. So whatever happened there, we're still protecting -- you swipe that card, debit card, credit card, or even corporate payments, it goes through 50, 75, 100 algorithms. So we're not relying just on the fact, oh, we have your social security and we're going to make that payment. No.

So we're going to try to protect our people anyway. But at the end of the day, there will be a dispute between the parties about who's responsible for what. This is not clarified in the law, either. This basically is a kind of a one-off, and one day it will be clarified.

But again, the important thing is we don't have proper cyber law. We need it to be part of trade. We need to have a way to go after the bad guys. We need a whole bunch of things that could make it far better, that could protect the United States of America. This is one instance that's going to get a lot of attention. A broader lesson of this, it is a big deal. There are electrical grids, there are airplanes. There's going to be autonomous cars. Obviously there's the financial system. It's a big deal. It needs to be -- you know, you can't share information with the government like you could in normal cases, you know, because they're not allowed to under federal law today. Certain government agencies can't share information with the bank.

I think that should be changed in this instance. Because, as you know, you would be very upset if you found out that the federal government can't share information with the terrorist groups that protect us from terrorism in New York City. You expect that to happen.

In this case, they know some stuff but they can't tell us. It's not right, because we are, in this case, the cop. We need to have the information to do a better job to protect you.

And so I think we have to really look at this. And, you know, President Obama had a group who was doing it. And President Trump has a group that's doing it. It's just really important it gets done well. And it's one of those things that cuts across so many areas that it's got to be well-managed.

ANDREW ROSS SORKIN: Let's talk about the banking business. We have a group of investors here. Do you think the banking business itself is an attractive place to put your money right now?

JAMIE DIMON: Yeah, I think banks in the United States are very sound. But it's not an argument, the banks are sound, they're making record profits, and that's why nothing was held back. That's a false argument, too. The problems the banking system made are what they made ten years ago. And that doesn't answer the question what they might have done under certain circumstances that could've helped the economy grow. I just see people come up with very simplistic statements which are dead wrong.

But the banks are very healthy here. Capital liquidity, a survey just came out of JD Power that they're actually trusted and respected by their clients; that they like the services that are coming. ADP, ATM, depositing checks, you know, getting stuff online. So banks are healthy. And, you know, you all have -- when you make any investment, you've got to look at the specific companies and decide which ones you want.

ANDREW ROSS SORKIN: But how are we all supposed to think about what appears to be the disintermediation by all of these new companies, of virtually every slice of the banking pie?

JAMIE DIMON: I don't know how to answer that. You know, that's not the way you should look at it, okay? Look, you never want to be, CO of a company, get complacent and say that doesn't matter, ever. Because then you're saying everything wrong to your people. So -- and there are people, there have always been other institutions, nonbanks, in tech, that do stuff around the services of financial and make a lot of money. You want that. It's called the free market. It's called capital. I want competition.

But if you said to me in P2P lending I'm really not that worried. And you said -- you know, if you look at certain things, it would be like ECM, DCM, big investing, moving money around, not really that worried. I'd be worried if I didn't say we had to do a better job and make that cheaper, better, faster for you.

So I think if you look at some of these things we do, yeah, it should be realtime, not days later. Other things should come with information, not without information. We can do straight-through processing on a lot of things and make it easier for institutional clients or consumer clients.

I think the place that I worry the most about disruption -- I'm not worried, but we should always -- is payments. There's a lot of things on payments that very smart people, they still use the banking system.

And you can find a way they're going to try to tell you not to use the banking system. You can take trips around the world. You see people do quite a good job serving clients not using banks anymore. And right now most of the payments at the end of the day either use a debit card, a credit card, or ACH payment to move money. Banks are doing authentication, certification, the movement of the money, AML, BSA. And, you know, it would be terrible if we did all that for them and we never got paid for it.

So there is this free rider issue, which I do notice every now and then.

ANDREW ROSS SORKIN: You made a comment earlier today that Bitcoin was a fraud.

JAMIE DIMON: Yeah.

ANDREW ROSS SORKIN: Why is Bitcoin a fraud?

JAMIE DIMON: Yeah, so -- blockchain, which is the technology from Bitcoin, the currency, and now there are multiple currencies. And so I'm talking about not Bitcoin per se; I'm talking about currencies. You know, the first -- and the reason -- and I'm not saying go short. Because I heard Jim. Bitcoin can sell a hundred thousand dollars at Bitcoin before it goes down. This is not advice on what you do. My daughter bought some Bitcoin and it went up and she thinks she's a genius now.

[LAUGHTER]

JAMIE DIMON: But I did refer to it like the tulip bulb crisis of the 1700 s or whatever.

But here's the reason. Governments, the first thing they do is form a currency. They like to control the currency. They control it through a central bank. They also like to know who has it, where it is, where it's going. Okay? And you saw China is closing down the Bitcoin exchanges.

And all I ever said is that Bitcoin, the bigger these things get, the more government -- right now they look at it as a novelty. And they love, in Washington, technology, we love technology. Waiting until someone gets hurt, waiting until it's used for illicit purposes, which is somewhat used for illicit purposes, they close it down.

And that's my point. You can argue there's -- and I also think there's a good reason for it. If you're doing -- if you're in Venezuela or Ecuador, or North Korea, you're better off probably using Bitcoin than using their currency. That can't possibly be true in the United States unless you're speculating, and that isn't a reason to say something has value. Because other people are going to speculate. That's tulips. And that's what I was saying. So I don't think -- and also, like I said, the other reason it's closed down is because it's used for illicit purposes. And so it's just not a real thing, and eventually it will be the emperor without clothes.

ANDREW ROSS SORKIN: You also made a comment about trade investment at the bank. In large part, I imagine, because of the low volatility in the market.

JAMIE DIMON: Yeah, but --

ANDREW ROSS SORKIN: 20% this year?

JAMIE DIMON: I said the analysts are down to about 20% or something like that, quarter over quarter. But, again, I think that's completely missing the point, okay? It's not that you're trying to hide behind what it is, yes, it's low volatility and it is what it is. We do $2 trillion a day of securities, buying and selling. We do it on 26 trading floors around the world. We do it across 120 different currencies, credit, mortgages, sovereign debt, swaps, effects, all mostly by end users for all legitimate purposes. The business is serving you, day in and day out, execution, building technology, more and more electronics, straight-through processing, automatic conversion of currencies.

That's the business. Great salespeople, great ideas, great execution, great electronics. Business itself, you know, it will have these episodic things. And, you know, of course those episodic things are going to be driven by volatility, which can reduce -- sometimes volatility is good. Sometimes it's bad. So don't look at volatility when it goes up. Somebody will be sitting there saying, well, the reason we got killed is because volatility caught us by surprise, you know, and so you can be on the wrong side of a market.

Remember you always -- trade has -- on the wrong side of the market. When people want to sell, they don't want to sell to you. And some of them, that is like a herd. So you've got to position, hedge right, market, stuff like that. So it's a business that we're going to grow over time. It's going to grow with asserts in the management, it's going to grow the corporation, going to grow the needs, going to grow the trade. It's going to grow. I think it's going to be a great business over time. We earn a good return on it. And, yes, quarter by quarter it goes up or down. We're thinking about not selling to anyone anymore. Like it just gets too much unnecessary attention.

ANDREW ROSS SORKIN: You think you will change that for real?

JAMIE DIMON: Might.

ANDREW ROSS SORKIN: What would --

JAMIE DIMON: It takes five minutes every time you talk to someone from the press.

[LAUGHTER]

JAMIE DIMON: Or analyst. I'm not blaming the press.

ANDREW ROSS SORKIN: Does the low volatility, by the way, make sense to you given all of the challenges and headlines in the world today?

JAMIE DIMON: Oh, listen, markets are markets. There's low volatile until they're high volatile. The stock market is high until it goes low. Markets therefore have always been wrong. And I think people are making mistakes. I can give you reasons why it might be low. We've had this fairly consistent, coherent, consistent growth. But forget the geopolitical noise and stuff like that. We're chugging along, 2%. Europe is doing 2%. Russia -- I mean, Japan is doing 1.5%, China's doing their 6%. You know, earnings are doing okay. We've had a fairly benign economic environment.

That's a reason. I can give you another reason is that the Central Banks of the world that bought $12 trillion of securities. 12 trillion. Since they started doing QE. And that's only just the U.S. That's an awful lot of security purchases that might -- in all things be equal, and remember things are never all equal, can reduce volatility. And there may be other sides that are known. And once other sides happen, watch out. Then volatility goes way up. They'll say they're a genius, they figured out when it's going to happened. I don't guess on which kind of volatility. Like I said, we do a business. And we have to manage the volatility.

It's no different than, honestly, if you're a pizza shop, you manage the volatility of the cost of mozzarella. It's what it is. It's called business. I don't worry that much about it. I do think people are eating more pizza.

[LAUGHTER]

ANDREW ROSS SORKIN: Do you think interest rates should go up by the end of the year, with these hurricanes this fall?

JAMIE DIMON: The hurricanes are irrelevant. I wouldn't have any policy matter as a function of hurricanes. Going to reduce GDP in the short run, they'll probably increase it after that. I'll let the economists figure it out. But almost a $20 trillion economy, that isn't a reason to change monetary policy. It will create a lot of noise in the numbers, but I wouldn't overreact to that.

Advice, it's very sympathetic. We're doing -- just so you know, we're going to do a lot for affordable housing, get these people in these states 20,000 people in Florida, 6,000 in Houston. Most of the banks are waiving fees, delaying loan payments, offering special services for your employees and stuff like that.

The question about rates and QE is always important at the same time, say the why. Okay? So I think rates need to go up. And for as long as the why is because the economy is strong and may be strengthening, that's a good reason. It's not a bad reason.

You know, remember Paul Volcker raised rates, people may have forgotten, 2%, 25 basis points, 2% Sunday night. Not in between meetings. On a Sunday. Okay? And he did it because inflation was going up, the stagflation at the time. That's a bad why. They show if the why is doing well and the jobs are coming back, and people are entering the labor force, the economy will dwarf rates, the importance of rates.

And so far that's what they've been doing. They've been watching the economy and lowering rates. I'm hopeful that will continue because I think rates do need to go up and the economy continues to be stable.

You know, people are joining the workforce, a lot of capital, markets are wide open, no major potholes in the American economy. I'm putting geopolitics -- that would change if you might treat so many things, so they continue to raise rates, and they start QE. But it's going to help the economy, you'll all be fine.

But as a matter of risk management, don't assume that.

When we look at our risk we take, we also run the other scenario, that inflation rears its ugly head, growth is slowing down, you still have to do it. That has a very different outcome and no one knows what's going to happen in the future, so you have to prepare for both.

The Federal Reserve isn't in a position where they can tell you that because they may think that way, too, but that would scare you. They want you not to be scared. They don't want you to save your money. They want you to continue doing exactly what you're doing. So they're in a different position than what they can say publicly.

ANDREW ROSS SORKIN: A name has come up a multiple times today, I want to ask you about Gary Cohn. Does he make a good Fed Chair regardless if he left the administration, would be disastrous?

JAMIE DIMON: Well, I have enormous respect for Gary and I think he would probably do almost any job well. You know, whether he wants the Fed Chair, I don't know. I don't think you have to be an economist, but, you know, Gary, with all the experience, in the globe, the economies, I'm sure he's explained economic stuff for years. And it wouldn't be disastrous but we're all comforted by the fact that, you know, you've got professional people around the President.

I do think -- you know, you saw Steven Mnuchin today, and Gary Cohn and Rex Tillerson and General Mattis and General Kelly, General Mc Master. Those -- the President needs strong people, and Gary is one of them. I do think, you know, if he wasn't there, obviously, other people could do the job, that would probably be a negative to how people view potential outcomes for tax and things like that.

ANDREW ROSS SORKIN: Okay. I'm going to make it more complicated for you. You've seen the speculation in the press. Would he make a good successor for Jim --

JAMIE DIMON: It wasn't speculation. Someone wrote a fantasy story. And then the rest of you -- the rest of you just started repeating it. The successor for JPMorgan is inside JPMorgan.

ANDREW ROSS SORKIN: Let me ask you --

JAMIE DIMON: Like I said, I have a new respect for Gary. So don't confuse the two. But, you know, our company is large. It's global. We're in consumer businesses, cash management business , custody businesses, and we've got several people who are unbelievably talented. I should brag, too, by the way. 50% of the operating community is now women. Just promoted Lori Beer to run technology and Robin Leopold, the head of HR. So we're really doing a great job. Because they're good. Not because they're women, by the way.

ANDREW ROSS SORKIN: Let me ask a succession question. There have been a number of very high-profile people who have left JPMorgan over the years. And a narrative has developed, whether it's right or wrong, that great people around Jamie have somehow left the building. And you've made the argument that's wrong. You've made the argument --

JAMIE DIMON: I know. I'm not making the argument, I know who were successful.

ANDREW ROSS SORKIN: What are investors missing, then?

JAMIE DIMON: Well, I don't think investors have said what you're saying. We've obviously lost some very good people. And I'm proud of them. They're doing a great job at their companies, Jes Staley at Barclays and Bill Winters at Standard Chartered, and that's good. That does not mean -- you know, very often that does not mean they were going to get the options they wanted inside JPMorgan. Because you're going to have --

ANDREW ROSS SORKIN: So you --

JAMIE DIMON: I'm not talking about anybody in particular. You're going to have -- no. You're going to have people leave that aren't going to get my job, and people will say they were forced out or something like that. And sometimes they had better opportunities. Sometimes they retire their jobs. We don't go out there and tell you all why and we're not going to. But I will tell you we've got the best management team ever. There's several people at the board. It's a board decision, not a Jamie Dimon decision. There's several people in the company, the board would say the best people we've ever had, take my job and they could do it today. And that's the most important thing that this company would be -- you'd have good leadership today if I wasn't here. Not my preference, but --

[LAUGHTER]

JAMIE DIMON: -- it would be okay.

ANDREW ROSS SORKIN: How long do you want to do it for?

JAMIE DIMON: Five years. I told you that.

ANDREW ROSS SORKIN: Why?

JAMIE DIMON: I love what I do.

ANDREW ROSS SORKIN: What is it about five years?

JAMIE DIMON: It's just a running joke. I say five years.

[LAUGHTER]

JAMIE DIMON: It's not up to me; it's up to the board. It will also relate to when these, you know, potential successor might be ready. Because, obviously, you don't want to lose someone who's going to have a good 10- or 15-year run in the next two years. That would be, like, selfish. I'm not going to do that.

So it's a combination of factors. I love it. As long as I have the energy to do it, as long as the board wants me to do it, as long as the management team is functioning, we've got -- you saw Mary Erdoes today, exceptional talent. So we've got a great management team. We work well together. And we need each other. I mean, it is a large company that's global, and we all work real hard, but we can't all do the same thing at the same time. So we feel great about it.

If I lost my job today, I would still miss the camaraderie of coming into the office every day and calling you up, and what's going on, and explain that to me, and let's go do this. I would miss the challenge, the intellectual challenge of it all. I'd miss having you talk to me about certain stuff like that. And I'd miss the crusade. Like when you wake up in the morning you have something you want to accomplish and a bunch of people. And those three things still feel great to me. So, you know, I wouldn't go do this again. I'm not going to run a big company. But I would miss those things. I'm not going to wake up tomorrow and just twiddle my thumbs, and -- I would be I would get bored too quick. I've tried. I've tried for a while when I left Citi to -- that's why I said it's too much, I had to get back to work.

ANDREW ROSS SORKIN: I want to end on this. And it's really a management question. The late, great Jimmy Lee, our old mutual friend said this: "More courage is the most valuable and usually the most absent characteristic in men." He went on to say that "Jamie Dimon has more courage running through his veins."

When you look at this year, 2017, at managers in America of public or private companies, who do you look at today and say that guy or that woman has great moral courage in Corporate America?

JAMIE DIMON: I'll name two. I mean, I think Jeff Bezos does. I think Tim Cook does. I know a lot of other CEOS do. I know a lot of people do. So I think it's not that rare. But I do think it is true, you know. All of you, you know, when you're under pressure and there's a conflict, there's something there, it's easy to want to hide in your hole. I want to hide in my hole sometimes. I don't want to deal with these issues. I'd rather you deal with the issue. But there are certain times you've got to try to do the right thing. I always tell people do the right, do the right thing, do the right thing; not the easy thing, not the expedient thing. It's always -- sometimes it's hard to know what it is. And sometimes you don't know it on your own.

So maybe part of that moral courage you've been talking about is we don't have a lot of conversations about people, situations, board, before we make a very tough decision. We want to make the right decision; like I said, not the fast one, not the speedy one, not the expedient one, not the easy one. And the easy, quick decisions, sometimes they'll come back and haunt you. And so it could be getting out of a business. It could be having someone leave the company. It could be taking a public stand you didn't want to take. Those things I think people should do in their personal lives and in their professional lives.

ANDREW ROSS SORKIN: Jamie Dimon, everybody.

JAMIE DIMON: Thank you very much for having me here. Thank you.

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