×

CNBC TRANSCRIPT: CNBC'S MELISSA FRANCIS SPEAKS WITH JPMORGAN CHASE CHAIRMAN & CEO JAMIE DIMON TODAY ON CNBC'S "THE CALL"

WHEN: TODAY, WEDNESDAY, AUGUST 10TH

WHERE: CNBC'S "THE CALL"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with JPMorgan Chase Chairman & CEO Jamie Dimon today on CNBC's "The Call." All references must be sourced to CNBC.

Jamie Dimon on Financials & Europe: http://video.cnbc.com/gallery/?video=3000037613

Jamie Dimon's Road Show: http://video.cnbc.com/gallery/?video=3000038445

*******************

FRANCIS: THANKS SO MUCH I'M JOINED BY JAMIE DIMON THE CEO OF JPMORGAN CHASE. JAMIE, LET ME ASK YOU WHAT MANDY WAS JUST TALKING ABOUT. WHAT IS YOUR EXPOSURE TO EUROPEAN BANKS RIGHT NOW?

DIMON: SO IT'S IMPORTANT WE HAVE BEEN IN EUROPE FOR HUNDREDS OF YEARS. WE CONTINUE TO DO BUSINESS THERE. WE HAVE MANAGEABLE EXPOSURE TO ALL OF THE BANKS. WE WON'T CUT AND RUN. WE ARE VERY CAREFUL WHAT WE DO BUT WE ARE NOT GOING TO LEAVE EUROPE. THERE ARE A LOT OF COMPANIES WE ARE DOING BUSINESS WITH. WE FEEL QUITE COMFORTABLE WITH IT.

FRANCIS: WHAT IS YOUR EXPOSURE LIKE. AN ANALYST RECENTLY SAID MIKE MAYO 17% OF REVENUE, 21% OF ASSETS IS ABOUT WHAT YOUR EXPOSURE IS. DOES THAT SOUND ABOUT RIGHT?

DIMON: I THINK THAT'S ALL OF EUROPE AND ALL OF OUR BUSINESSES COMBINED, YES.

FRANCIS: AND YOU'RE COMFORTABLE WITH THAT?

DIMON: TOTALLY COMFORTABLE WITH IT, YES.

FRANCIS: RECENTLY ON A CONFERENCE CALL YOU SAID YOUR NET EXPOSURE TO PORTUGAL, ITALY, IRELAND, GREECE AND SPAIN WAS ABOUT 15 BILLION. THAT YOU'D LOSE 3 BILLION AFTER TAX IF THERE IS AN EXTREME OUTCOME, IS THAT ABOUT RIGHT.

DIMON: WE STILL THINK THAT IS A GOOD ESTIMATE. IT IS 3 BILLION AFTER TAX FOR AN EXTREME OUTCOME THAT WE DON'T BELIEVE IS GOING TO HAPPEN. BUT WE STAY IN THOSE COUNTRIES. STILL DO A LOT OF BUSINESS THERE. BIGGEST ARE ITALY AND SPAIN. THOSE EXPOSURES, A LOT OF THEM ARE ALSO CORPORATE. THESE ARE CORPORATIONS THAT WILL PROBABLY BE FINE REGARDLESS OF WHAT HAPPENS IN ITALY AND SPAIN.

FRANCIS: WHY DO YOU SAY YOU DON'T THINK THERE IS A NEGATIVE OUTCOME THERE?

DIMON: I DON'T THINK THERE WILL BE THE WORST CASE OUTCOME THERE. I THINK THE EUROPEAN POLITICIAN IS DEVOTED TO MAKING IT WORK. IT'S COMPLEX IT IS VERY MESSY. I THINK IT WOULD HAVE BEEN BETTER IF THERE WAS ABSOLUTE CLARITY HOW IT WAS DEALT WITH BUT MY GUESS IS THEY WILL STILL CONTINUE TO WORK IT THROUGH.

FRANCIS: DOES THAT CAPTURE THE COUNTER-PARTY EXPOSURE AS WELL? WHEN YOU TALK ABOUT EXPOSURE THERE, THAT'S THE THING THAT EVERYBODY IS WORRIED ABOUT?

DIMON: WELL COUNTER-PARTY EXPOSURE IS JUST ANOTHER FORM OF CREDIT EXPOSURE. JUST A NEW WORD THAT EVERYONE WANTS TO TALK ABOUT BUT IT IS VIRTUALLY THE SAME THING.

FRANCIS: GRIFFITH HAS A QUESTION FOR YOU.

BILL GRIFFETH: JAMIE A LOT OF THE HAND RINGING TODAY IS ABOUT THE POSSIBILITY THAT FRANCE IS DOWNGRADED, LET ME ASK YOU I HAVEN'T HEARD YOUR RESPONSE OF THE S&P DOWNGRADE OF THE U.S. CREDIT RATING. WAS IT DESERVED? WERE THEY TOO SOON? ARE WE A SPECIAL SITUATION THAT DOESN'T DESERVE A DOWNGRADE BECAUSE WE CAN PRINT OUR OWN MONEY? WHAT IS YOUR RESPONSE?

DIMON: I LOOK AT IT DIFFERENTLY. I THINK PEOPLE HAVE THEIR RIGHT TO THEIR OPINIONS. S&P IS JUST AN OPINION. IT'S A WELL THOUGHT THROUGH OPINION THEY HAVE VERY STRICT GUIDELINES. MOST PEOPLE I SPEAK TO IN THE MARKETPLACE, THE BIG PARTICIPANTS, THEY DON'T RELY ON S&P RATINGS IT MAKE THEIR DECISIONS. TO ME, PEOPLE CAN HAVE OPINIONS, WARREN BUFFETT CAME OUT AND SAID HE THINKS IT IS AAAA. SO THAT'S WHAT MAKES MARKETS. I DON'T PERSONALLY THINK IT IS THAT MATERIAL A THING. I DO THINK UNDERLYING WHAT S&P SAYS, AND YOU CAN ARGUE ALL YOU WANT, THE UNITED STATES NEEDS TO SHOW FISCAL DISCIPLINE. WE NEED TO SHOW IT FOR OURSELVES NOT CAUSE OF CHINA NOT CAUSE OF S&P, WE NEED TO SHOW FISCAL DISCIPLINE. I AM HOPEFUL THAT MAYBE WE WILL DO THAT SOON.

GRIFFETH: BUT A COMPETITOR OF YOURS AT ANOTHER BANK SAID TO ME YESTERDAY OFF CAMERA, THAT THAT DOWNGRADE MAKES IT HARDER FOR YOU GUYS TO MAKE MONEY IN YOUR BUSINESS. IT MEANS MORE COST-CUTTING. LESS SERVICE TO CUSTOMERS. IT JUST IS A MUCH MORE DIFFICULT ENVIRONMENT. IT MAY BE SYMBOLIC BUT IT DOES HAVE A MATERIAL IMPACT ON YOUR INDUSTRY.

DIMON: HONESTLY, I DON'T AGREE WITH ALL THAT. OBVIOUSLY IT HAS AN IMPACT. IT IS NOT A MINOR EVENT. WHEN HISTORY BOOKS ARE WRITTEN,IT WILL HAVE A CHAPTER OR A SENTENCE IN THE HISTORY BOOKS. IT'LL MAKE IT HARDER, MAYBE, MAYBE IN SOME CASES. BUT BILL WE DON'T RUN THE COMPANY BASED ON ONE RATING OR ONE COMPANY OR THINGS LIKE THAT. WE WILL DO FINE REGARDLESS OF THE DOWNGRADE.

FRANCIS: WHAT DO YOU THINK OF THE HIT THE FINANCIAL STOCKS ARE TAKING THIS MORNING?

DIMON: YOU KNOW WHAT IS REALLY IMPORTANT IN THIS WORLD, THE REASON WE'RE HERE AND THE REASON WE INVITED CNBC TO JOIN US, WE ARE ON A ROAD TRIP WITH THE BUS, WE ARE SEEING TOP BANKERS AND TELLERS AND BRANCH MANAGERS -- TAKE CALIFORNIA, WE WILL OPEN 200 BRANCHES HERE IN A TWO AND A HALF YEAR PERIOD SINCE WE TOOK OVER WAMU, WE'VE ADDED HUNDREDS OF BANKING OFFICES HERE. WE ARE MAKING A BILLION DOLLARS IN SMALL BUSINESS AND MIDDLE MARKET LOAN. WE ARE GROWING IN CALIFORNIA. IN FACT, WE ARE GROWING ALL AROUND THE NATION. OUR JOB AS A BUSINESS IS TO GROW, EXPAND AND CREATE MORE CLIENTS. WE THINK WE ARE DOING QUITE FINE THAT. WE DON'T RUN THE BUSINESS BASED UPON WHAT HAPPENS IN THE MARKET IN A DAY. I NEVER WOULD. WE NEVER HAVE. MARKETS ARE VOLATILE. PROBABLY FOR PRETTY GOOD REASONS. A LOT OF UNCERTAINTY IN THE WORLD OUT THERE, BUT WE WILL STILL OPEN BRANCHES TOMORROW AND HIRE BANKERS TOMORROW AND CREATE CLIENTS TOMORROW.

FRANCIS: IT'S BUSINESS AS USUAL, MORE OR LESS. YOU ARE CONTINUING ON YOUR SCHEDULE REGARDLESS OF WHAT IS GOING ON IN THE MARKET?

DIMON: IF I THOUGHT IT WAS A CALAMITY I WOULD GO BACK TO NEW YORK. BUT I THINK THIS IS JUST A LOT OF VOLATILITY IN THE MARKETPLACE. AMERICA WILL GET THROUGH THIS TOO.

FRANCIS: ARE YOU TELLING YOUR TEAM TO DO ANYTHING DIFFERENTLY THIS WEEK?

DIMON: OBVIOUSLY WHERE WE TAKE RISK ON OUR TRADING FLOORS, PEOPLE ARE CAREFUL. BUT THEY ARE STILL DOING BUSINESS WITH CLIENTS. A LOT OF MARKETS ARE FINE. REPO MARKETS, MORTGAGE MARKETS, SOME CREDIT MARKETS ARE STILL OPEN. EQUITY MARKETS ARE VERY VOLATILE. WE TRY TO BE CAREFUL. BUT IT DOESN'T MEAN WE DON'T DO BUSINESS WITH CLIENTS.

FRANCIS: LET'S TALK ABOUT MAKING MONEY IN YOUR BUSINESS. THE FEDERAL RESERVE CAME OUT AND SAID THEY WILL KEEP RATES LOW FOR THE NEXT TWO YEARS. YOU RECENTLY SAID YOU NEED INTEREST RATES TO GO UP IN ORDER TO PROVE YOUR NET INTEREST MARGINS. DOES IT CRIPPLE YOUR BUSINESS? DOES IT MAKE IT HARD FOR YOU?

DIMON: I DIDN'T SAY THAT. AND I CONSTANTLY READ PEOPLE SAYING THAT WE MAKE MONEY THE FED IS SUPPORTING BANKS WHICH I THINK IS COMPLETELY UNTRUE

FRANCIS: ISN'T IT THE OPPOSITE?

DIMON: WE ARE ESSENTIALLY MATCH-FUNDED. RATES AFFECT OUR BUSINESS. IF SHORT RATES GO UP WE CAN PROBABLY MAKE MORE MONEY. NOT LESS MONEY. IF LONG RATES GO UP WE WILL PROBABLY MAKE SLIGHTLY MORE MONEY NOT LESS MONEY WE TRY TO MATCH THOSE FUNDS. WHAT REALLY DRIVES THE BUSINESS IS MORE CLIENTS, MORE DEPOSITS, MORE LOANS. MORE INVESTMENT BANKING BUSINESS. THAT'S WHAT WE ARE LOOKING AT FUNDAMENTALLY. IF YOU LOCK AT UNDERLYING J.P. MORGAN, WE HAVE MORE CREDIT CARD CLIENTS MORE CONSUMER BANKING CLIENTS MORE MIDDLE MARKET CLIENT, MORE SMALL BUSINESS CLIENTS, MORE LARGE CORPORATE CLIENTS THAT IS WHAT WILL DRIVE US OVER TIME. A LOT OF THIS OTHER STUFF YOU HAVE TO MANAGE THROUGH AND AROUND.

FRANCIS: WHAT DO YOU THINK ABOUT WHAT THE FEDERAL RESERVE DID. DO YOU THINK IT IS GOING TO HELP STIMULATE THE ECONOMY? DO YOU THINK IT JUST DRIVES UP EQUITY PRICES AND ASSET PRICES?

DIMON: I THINK THE WORLD OF BEN BERNANKE AND I AM GOING TO LEAVE MONETARY POLICY TO THEM. THEY ARE LOOKING AT A LOT OF FACTORS THEY ARE VERY SMART ECONOMISTS OUR JOB IS TO MANAGE THE COMPANY THROUGHOUT WHATEVER THE ENVIRONMENT IS.

GRIFFETH: JAMIE, I DON'T KNOW IF YOU HEARD MEREDITH WHITNEY'S COMMENT THIS MORNING SHE DIDN'T CITE A SPECIFIC BANK, BUT SHE IN THE AGGREGATE SAID YOU ARE A BUNCH OF WALKING ZOMBIES. ZOMBIE BANKS IS THE TERM SHE USED BECAUSE YOUR BUSINESS MODELS HAD TO CHANGE. YOU ARE NOT MAKING LOANS AND NOT DOING THINGS TO HELP GROW THE ECONOMY AND YOU ARE HOLDING ON TO SECURITIES THAT HAVE NO VALUE RIGHT NOW. YOU ARE KIND OF STUCK BETWEEN A BAD ECONOMY AND MORE REGULATIONS COMING FROM THE GOVERNMENT RIGHT NOW. DOES SHE HAVE A VALID POINT?

DiMON: TOTALLY. LOOK, I LOVE MEREDITH BUT HONESTLY, MOST OF THAT STUFF IS HOG WASH. FIRST OF ALL, ALL BUSINESSES HAVE THINGS THAT CHANGE ALL THE TIME. INTEREST RATES, COMMODITY PRICES, COST OF WAGES, DEMAND SUPPLY AND YOU HAVE TO MANAGE AROUND THAT. J.P. MORGAN CHASE SINCE LEHMAN BROTHERS WENT BANKRUPT HAS LENT OR RAISED FOR COMPANIES AROUND THE WORLD $4.5 TRILLION. OKAY WE HAVE MORE, OUR CREDIT CARD BUSINESS SALES ARE UP 10% YEAR OVER YEAR. WE HAVE MORE CHECKING ACCOUNTS, MORE BRANCHES WE HAVE MORE SMALL BUSINESSES -- SMALL BUSINESS LENDING IS UP I THINK 25% THIS YEAR. LAST YEAR IT WAS UP 25% THE YEAR BEFORE. MIDDLE MARKET LENDING HAS BEEN UP ALMOST EVERY QUARTER. BUSINESS LENDING UP THE LAST FOUR OR FIVE QUARTERS. CORPORATION CAN RAISE ALL OF THE MONEY THEY WANT. IT IS NOT TO SAY THERE ARE NOT NEGATIVES AGAINST BANKS. HEAD WINDS, OF COURSE. BAD ECONOMY IS A HEAD WIND. VOLATILITY MAY NOT BE, BUT PEOPLE BEING SCARED IS A HEAD WIND. THE MOST IMPORTANT THING WE LOVE TO SEE IS RECOVERY IN JOBS. I THINK GROWTH IS THE MOST IMPORTANT THING. WE ARE DOING EVERYTHING WE CAN AND I THINK MOST BANKS ARE. I DON'T THINK BANKS AREN'T LENDING. I THINK BANKS ARE LENDING TO PEOPLE WHO HAVE VALID CREDIT. WE WILL HAVE DONE $400 BILLION IN MORTGAGE LOANS THE LAST TWO AND HALF YEARS. 30 BILLION IN SMALL BUSINESS LOANS THE LAST TWO AND A HALF YEARS. AND I THINK I SPEAK FOR A LOT OF BANKS OUT THERE THEY ARE ALL DOING THAT. I THINK THE PEOPLE ARE WORRIED THE ECONOMY HAS BEEN TERRIBLE FOR A LONG PERIOD OF TIME, WE AREN'T USED TO THAT. WE ALL WANT TO SEE GROWTH.

FRANCIS: BUT HOW HIGH DO INTEREST RATES NEED TO GO TO INCENTIVIZE YOU TO MAKE LOANS TO PEOPLE WHO HAVE LESS THAN PERFECT CREDIT. THAT'S THE KNOCK ON LENDING RIGHT NOW IS THAT YOU HAVE TO HAVE PERFECT CREDIT IN ORDER TO GET A LOAN.

DIMON: I THINK CREDIT STANDARDS WENT UP BUT IT HAS NOTHING TO DO WITH INTEREST RATES. CREDIT STANDARDS WENT UP FOR A GOOD REASON PARTICULARLY IN THE MORTGAGE MARKET BECAUSE CREDIT STANDARDS HAD GOTTEN SO LOOSE AND PART OF WHAT CAUSED ALL THESE PROBLEMS. ALL OF THE THINGS YOU JUST SAID ABOUT LOANS ARE IN SPITE OF RATES BEING LOW. WE ARE GENERALLY MUCH MATCH FUNDED. SO WE MAKE A LOAN AND WE BORROW THE MONEY TO MAKE THAT LOAN AND MAKE A SMALL SPREAD IN THE MEANTIME. IT IS NOT RATES.

FRANCIS: I KNOW HAVE YOU THOUGHTS ABOUT REGULATION IN WASHINGTON THE IMPACT IT IS HAVING ON THE ECONOMY, AND I WILL ASK YOU ABOUT THAT AFTER THIS BREAK. STAY WITH US.

FRANCIS: WE ARE BACK WITH OUR EXCLUSIVE INTERVIEW WITH JAMIE DIMON YOU HEARD WHAT BOB SAID THERE ARE PEOPLE CONGRATULATING YOU FOR BEING OUT AND ABOUT. WE ALSO HAVE E-MAILS FROM PEOPLE SAYING YOU SHOULD BE BACK IN NEW YORK MANAGING THE BANK. THAT YOU SHOULDN'T BE OUT ON A TOUR.

DIMON: THE BANK IS MANAGED BY HUNDREDS OF VERY COMPETENT CAPABLE PEOPLE. GETTING OUT ON THE ROAD I THINK THIS IS TRUE FOR ALL MANAGEMENT FIRST OF ALL IT IS A LOT OF FUN TO TELL THE PEOPLE THAT WE APPRECIATE THEM AND WE ARE PROUD OF HOW HARD THEY WORK. ON THE BUS IN BETWEEN STOPS WE HAVE BRANCH MANAGERS AND TELLERS. WE HAD A TELLER 22 YEARS OLD BEING PROMOTED TO BRANCH MANAGER TELLING US HOW WE CAN RUN OUR BUSINESS BETTER. IT IS A GREAT THING TO DO IT IS A LOT OF FUN IT REMINDS YOU OF WHAT BUSINESS IS ABOUT. PETER DRUCKER SAYS THE POINT OF BUSINESS IS TO CREATE A CLIENT. THAT'S WHY WE'RE HERE I REMIND PEOPLE IN CORPORATE HEADQUARTERS, THAT THE ONLY REASON CORPORATE HEADQUARTERS EXIST IS BECAUSE IT SOMEWHERE THERE IS A CLIENT IN FRONT OF A BANKER. THAT'S WHY WHETHER IT IS A CORPORATION AN INSTITUTION BUYING AND SELLING SECURITIES OR RETAIL CLIENT. SO IT WAS GREAT IT GET OUT. WE LEARN A A LOT FROM FOLKS HERE. IT IS MORE UPLIFTING THAN BEING IN WASHINGTON OR NEW YORK. I AM ON THE ROAD WITH A LOT OF OTHER FOLKS WHO HAVE BEEN DOING A GREAT JOB RUNNING THIS COMPANY.

KATE KELLY: HEY, IT'S KATE KELLY BACK AT HEADQUARTERS JAMIE. GOOD TO HAVE YOU ON THE AIR. I WANTED TO ASK YOU YOU JUST TOUCHED UPON WASHINGTON AND I WOULD LOVE TO GET YOUR THOUGHTS ON THE LEADERSHIP OR LACK OF LEADERSHIP WE ARE SEEING RIGHT NOW. A LOT OF CRITICISM OF PRESIDENT OBAMA, A LOT OF CONCERNS EVEN ABOUT TIM GEITHNER, HOW DO YOU FEEL ABOUT LEADERSHIP FROM THOSE QUARTERS RIGHT NOW.

DIMON: I'M NOT GOING THERE. BUT I WILL TELL THAT YOU I WOULD LOVE TO SEE, THIS A NONPARTISAN THING. I'M NOT PERSONALLY INTERESTED IN DEMOCRATS OR REPUBLICANS THAT KIND OF STUFF. I WANT TO SEE THIS COUNTRY GROW AGAIN. I THINK WE NEED MORE COHERENT, CONSISTENT COORDINATED POLICY. WE ARE VERY SILOED AND WE TRY TO COME WITH QUICK ANSWERS AND QUICK ROLLOUTS. WE NEED AMERICA TO DO WHAT AMERICA USED TO DO IN OLD TIMES WHEN THINGS WERE TOUGH. PEOPLE GOT TOGETHER. THEY DIDN'T SCAPEGOAT. THEY ROLLED UP THEIR SLEEVES. THEY WERE VERY OPEN MINDED. THE POLICY ITSELF WAS COHERENT AND CONSISTENT. A LOT OF OUR POLICY IS COMPLETELY INCOHERENT AND INCONSISTENT, MADE IN THE MIDDLE OF THE NIGHT. AND I AM NOT SURE YOU ARE GOING TO COME UP WITH THE BEST WAY TO DO THAT. I THINK A SINGULAR FOCUS ON JOBS AND GROWTH WOULD BE A GOOD THING. I'M THRILLED TIM GEITHNER WILL STAY ON AS SECRETARY OF TREASURY.

KELLY: I WAS GOING TO TOUCH ON THAT JAMIE, TIM GEITHNER HAS GIVEN ASSURANCES THAT HE WILL STAY AROUND FOR NOW. BUT YOUR NAME COMES UP ALL THE TIME INEVITABLY WHEN THERE IS DISCUSSION ABOUT HIM LEAVING AS A POSSIBLE REPLACEMENT, COULD YOU EVER BE INTERESTED IN THAT JOB?

DIMON: NO AND THE OTHER THING I TELL PEOPLE IF YOU KNOW ME AT ALL, AND YOU KNOW ME A LITTLE BIT, I'M NOT SUITED TO POLITICS. YOU GUYS SHOULD STOP ASKING THAT QUESTION. I KNOW IT AND YOU KNOW IT.

GRIFFETH: I DON'T KNOW JAMIE YOU'RE RUNNING A PRETTY GOOD CAMPAIGN. THIS BUS TOUR IS MAKING YOU A LOT OF FRIENDS AND I WOULD THINK A LOT OF VOTES RIGHT NOW. SEEMS LIKE YOU ARE RUNNING FOR OFFICE.

DIMON: ANYONE WOULD RUNS A COMPANY GETS OUT IN THE FIELD AND WOULD SAY THE SAME THINGS I'M SAYING. IT IS GREAT TO DO. YOU LEARN A LOT. SHOW YOUR APPRECIATION. IT IS A MAGNIFICENT THING TO DO. WE DO IT ALL THE TIME, JUST NEVER DONE IT ON THE BUS. WE GO A LITTLE BIT OFF THE BEATEN PATH AS OPPOSED TO MAJOR CITIES. IT GIVES US A CHANCE OF QUIET TIME AND PRIVATE TIME WITH BRANCH MANAGERS AND TELLERS ET CETERA.

FRANCIS: TALKING ABOUT BEING CRITICAL OF WASHINGTON, IF YOU DON'T WANT TO BE DIRECTLY CRITICAL OF THE INDIVIDUALS THAT ARE IN WASHINGTON, WHAT ABOUT REGULATION IN GENERAL. YOU OFTEN SOUND OFF HOW IT IS ONE OF THE BIG THINGS STANDING IN THE WAY OF THE ECONOMY RIGHT NOW.

DIMON: I DON'T SOUND OFF.LET'S BE CLEAR. WE HAVE SUPPORTED 75% OF ALL REGULATION. WE WANTED -- WE WANT TO GET RID OF TOO BIG TO FAIL WHICH MEANS YOU NEED RESOLUTION AUTHORITY. WE BELIEVE IN HIGHER CAPITAL EQUITITY WE HAD NO PROBLEM WITH CFPB, WE JUST THOUGHT IT SHOULD BE PART OF THE BANKING REGULATORS. WE THOUGHT THERE SHOULD BE AN OVERSIGHT COMMITTEE TO MAKE SURE THERE ARE NO GAPS SYSTEM. SOME OF IT WE THINK HAS BECOME EXCESSIVE REMEMBER A LOT OF THIS HAS ADVERSE CONSEQUENCES. HERE I AM, A BIG BANK CEO, BUT I'M TELLING YOU, I THINK A LOT OF THIS REGULATION WILL HURT SMALL BANKS BY THE FACT THAT THEY THINK THIS WAS DONE TO HELP SMALL BANKS. I DON'T WANT TO HURT SMALL BANKS. I WANT THEM TO SUCCEED. IN FACT IN ONE OF THE PAPERS THIS MORNING THERE WAS A SMALL BANK THAT WAS GOING TO GET RID OF ITS CHARTER BECAUSE IT COULDN'T DEAL WITH SOME OF THE THINGS ANYMORE. SO WHAT I COMPLAIN ABOUT IS THAT MARKET HAS DONE A LOT OF THINGS ON ITS OWN. SIVS ARE GONE, ASSET BACK COMMERCIAL PAPERS MORE CONSERVATIVE MONEY MARKET FUNDS ARE MORE CONSERVATIVE. REPO IS MORE CONSERVATIVE. A LOT OF THINGS CAN'T BE REPO 'D AT ALL. CAPITAL IS HIGHER LIQUIDITY IS HIGHER THERE HAS BEEN BANK REGULATION -- DODD-FRANK. WHICH SOMETIMES I REFER TO AS DODD-FRANKENSTEIN. THERE HAS BEEN BASEL 2, BASEL 3, THE FSA. AND THEN WE HAVE TAX POLICY THAT IS AT THE MARGIN. YOU CAN ARGUE WITH ME BUT A NOT AT THIS STATEMENT, AT THE MARGIN IS DRIVING CAPITAL OVERSEAS. IMMIGRATION POLICY WE TRAIN SOME OF THE BRIGHTEST AND BEST PEOPLE IN THE WORLD AND DON'T ALLOW THEM TO WORK HERE. TALK ABOUT SCIENCE TECHNOLOGY,MATH AND SCIENCE. MICROSOFT BUILDS AN ENGINEERING PLANT IN VANCOUVER CANADA BUT NOT SEATTLE BECAUSE THEY CAN'T HIRE PEOPLE WHO ARE TRAINED IN U.S. UNIVERSITIES. WE SHOULD BE GIVING THOSE PEOPLE CITIZENSHIP. NOW YOU MAY HAVE NOTICED VANCOUVER REAL ESTATE IS BOOMING AND SEATTLE REAL ESTATE IS NOT I'M NOT SAYING IT IS DIRECTLY RELATED. IT IS NOT REGULATION PER SAY IT IS ALL OF THE THINGS TAKING PLACE WHICH IS HARD IT FIGURE OUT THE CUMULATIVE EFFECT. I DEFY ANYONE TO FIGURE OUT THE CUMULATIVE AFFECT.

FRANCIS: REGULATION HAS MADE IT HARDER FOR YOU TO MAKE MONEY. THAT'S IS ONE OF MEREDITH WHITNEY'S POINT EARLIER TODAY. CREDIT CARD FEES ARE LOWER FOR YOU THE REVENUE FROM THAT IS LOWER. THEY TOOK AWAY YOUR PROP DESK. THEY MADE IT HARDER TO LOAN. SOME PEOPLE SAY THEY DON'T WANT TO BUY FINANCIALS BECAUSE ITS TURNED YOU INTO A UTILITY.

DIMON: YOU ARE CONFUSING THINGS. SOME OF THE REGULATIONS HURT OUR PROFITS BUT WE WILL ADJUST TO IT I FULLY UNDERSTAND THAT. IT IS NOT GOING TO STOP US FROM BEING SUCCESSFUL. WHETHER I AGREE WITH IT AT ALL OR NOT. WE DIDN'T MAKE A LOT OF MONEY ON PROP TRADING SO THAT WASN'T A BIG DEAL AT ALL. THERE ARE HEAD WINDS FACING BANKS I NEVER DENIED THAT. THERES LITIGATION THERE'S REGULATION, ANTI-BANK SENTIMENT. SO IF YOU ARE A BUYER OF THE STOCK I CAN UNDERSTAND PEOPLE HAVE PLUSES OR MINUSES ABOUT THE STOCK. BUT WE ARE GOING TO CONTINUE TO BUILD THE COMPANY. I THINK THE STOCK WILL DO FINE OVER A LONG PERIOD OF TIME. BUT WE NEED CONSISTENT COHERENT POLICY TO CUT ACROSS ALL THINGS. IF YOU DO ONE THING AT A TIME, IMAGINE IF I WAS RUNNING J.P. MORGAN CHASE AND I WANT TO CHANGE THIS RETAIL BRANCH RIGHT BEHIND ME. A BEAUTIFUL BRANCH, BY THE WAY. WE ARE GOING TO CHANGE POLICY, PRICES, COMPENSATION, MARKETING, PROCEDURES, REGULATION, RULES, REQUIREMENTS, AND HOW WE HIRE AND WE DO IT ALL AT ONCE, WHAT'S THE OUTCOME? YOU DON'T KNOW. NO BUSINESS WOULD DO THAT IN THEIR RIGHT MIND.

KELLY: BOFA HAS BEEN REALLY CLOBBERED THIS WEEK DESPITE THE RALLY YESTERDAY BRIAN MOYNIHAN IS GOING ON THE OFFENSIVE TODAY TRYING TO TALK WITH ONE OF THEIR MAJOR INVESTORS TAKING ANY QUESTION. IF YOU AND BRIAN HAD A CUP OF COFFEE AND HE ASKED FOR YOU FOR INSIGHT OR ADVICE ON WHAT IS GOING ON, AND ON WHAT MAYBE HE SHOULD DO WHAT WOULD YOU SAY?

DIMON: NUMBER ONE, I BELIEVE YOU SHOULD TALK TO YOUR SHAREHOLDERS. THAT INCLUDES ANALYSTS WHO REPRESENT SHAREHOLDERS AND IN AN OPEN,FORTHRIGHT WAY. THE GOOD, THE BAD, THE UGLY. THAT'S THE WAY TO BUILD A COMPANY. YOUR PEOPLE INSIDE KNOW YOUR PROBLEMS YOUR PEOPLE OUTSIDE KNOW YOUR PROBLEMS. I THINK BRIAN IS DOING THE RIGHT THINGS. I DON'T KNOW BOFA INSIDE SO IT IS HARD FOR ME TO GIVE HIM SPECIFIC ADVICE BUT KEEP DOING WHAT YOU ARE DOING. DEAL WITH YOUR ISSUES FORTHRIGHT AND DIRECTLY AND THINGS WILL GET BETTER.

GRIFFETH: IT COMES DOWN TO AS YOU WELL KNOW THE ECONOMY DOESN'T GROW UNLESS YOU HAVE THE INTANGIBLE THING THAT WE CALL CONFIDENCE, PEOPLE DON'T BORROW MONEY IF THEY AREN'T CONFIDENT ABOUT THEIR JOBS. BANKS DON'T LEND TO THEM IF THEY ARE NOT CONFIDENT THEY WILL GET THEIR MONEY BACK. HOW DO WE RESTORE CONFIDENCE IN THIS ECONOMY RIGHT NOW.

DIMON: I AGREE. CONFIDENCE IS A LIKE A SECRET SAUCE. IT DOES ALL THE THINGS YOU SAID IT IS HARD TO MEASURE AND REALLY ADJUST. SO HERE'S WHAT I WOULD SAY TO THE AMERICAN PEOPLE IN TOTAL. WHEN YOU GO TO SLEEP AT NIGHT THINK ABOUT THE FOLLOWING BEFORE YOU GET DEPRESSED AND YOU SEE THE MARKET DOWN 500 POINTS. THIS NATION IS STILL THE GREATEST NATION ON THE PLANET. IT WAS THE FIRST DEMOCRACY ON THE PLANET. WE HAVE THE BEST MILITARY. GOD BLESS OUR VETERANS ALL AROUND THE WORLD. THOSE WHO HAVE SERVED AND THOSE WHO ARE SERVING TODAY. WE HAVE THE BEST UNIVERSITIES AND BEST BUSINESSES ON THE PLANET. THOSE THINGS I JUST SAID BEST UNIVERSITY, BEST MILITARY, BEST RULE OF LAW, MOST INNOVATION, THE HARDEST WORKING ETHIC OF ALL THOSE THINGS WILL BE HERE FOR DECADES. THEY AREN'T GOING WAY. THE STRENGTH IN THE SYSTEM WILL BLOW YOUR SOCKS OFF WHEN IT COMES OUT OF THIS MALAISE WE'RE IN. SO THOSE THINGS ARE THERE. NOW I DON'T THINK IT IS BAD THAT OTHER NATIONS ARE GETTING STRONGER THE UNIVERSITIES OR COMPANIES, WE HAVE TO RECOGNIZE THAT SO IF YOU SAY AS A COMPETITIVE MATTER MY COMPETITORS ARE GETTING STRONGER I TRY TO RECOGNIZE IT AND DO SOMETHING ABOUT IT. BUT THE FUNDAMENTAL STRENGTH OF THE NATION IS STILL THERE. WE ARE JUST STUCK. STUCK WITH ALL THE -- SOME LEGITIMATE. WE HAVE PROBLEMS IN EUROPE. PROBLEMS IN -- I THINK WE HAVE UNCOORDINATED POLICIES TAKING PLACE. PEOPLE ARE SCARED FROM A BUNCH OF THINGS BUT I THINK THIS WILL PASS TOO. I DON'T KNOW WHEN. THREE MONTHS, SIX MONTHS, NINE MONTHS OR A YEAR. BUT IT WILL PASS AND WHEN THE ECONOMY IS GOING AGAIN, IT'LL BLOW YOUR SOCKS OFF. EVERYDAY 130 MILLION PEOPLE GO TO WORK. 110 MILLION WORK FOR PRIVATE ENTERPRISE. 30 MILLION SMALL BUSINESSES WHO EVERY DAY GO TO WORK IF YOU LOOK RIGHT AROUND HERE, THAT WILL HAPPEN EVERYDAY. BY OUR NATURE, AMERICA WANTS TO WORK, GROW, EXPAND, IT WILL COME BACK. WE HAVE JUST -- I THINK WE -- I THINK UNCOORDINATED POLICY, WE SHOT OURSELVES IN THE FOOT. I THINK THE DEBT CEILING THING DEMORALIZED THE AMERICAN PUBLIC. WE HAVE TO STOP DOING THAT. WE HAVE TO PULL TOGETHER, GET TOGETHER AND WE WILL GET THROUGH THIS. THIS COUNTRY HAS BEEN THROUGH FAR WORSE, BY THE WAY AND WE SHOULD ALWAYS REMEMBER THAT. I'M POSITIVE IN THE VERY OPTIMISTIC IN THE LONG RUN.

FRANCIS: IS IT JUST A MATTER OF TAKING TIME? WOULD YOU LIKE TO SEE WASHINGTON GET OUT OF THE WAY OR IS THERE SOMETHING SPECIFICALLY THEY CAN DO?

DIMON: I BELIEVE WHEN THEY WRITE THE BOOK IN 15 YEARS, THE REASON IT TOOK SO LONG TO GET OUT OF THIS CRISIS IS BECAUSE OF ALL OF THE THINGS WE DID OF UNCOORDINATED POLICY DEBT CEILING TYPE THINGS THAT'S WHAT MADE IT TAKE SO LONG, THERE ARE REAL LEGITIMATE ISSUES ABOUT MORTGAGES, UNDERWRITING LEVERAGE. BUT COMPANIES ARE IN GREAT SHAPE. LARGE AND SMALL. SMALL BUSINESSES FAR STRONGER THAN IT WAS. CONSUMERS ARE A LOT STRONGER THAN A YEAR OR TWO AGO THEIR DEBT IS DOWN ALMOST A TRILLION DOLLARS. DEBT SERVICE INCOME IS BACK WHERE IT WAS 15 YEARS AGO. THERE ARE HUGE, POSITIVE SIGNS. IT IS JUST LIKE AN ENGINE WAITING TO GET GOING. I DON'T KNOW ALL THE THINGS HOLDING IT BACK BUT I THINK WE CREATED SOME OF THEM. I BELIEVE IF TOM FRIEDMAN WROTE A PAPER IN THE NEW YORK TIMES TODAY AND SO DID KEVIN WORSH AND I FORGOT WHO WROTE IT IN THE WALL STREET JOURNAL, TAKE THOSE TWO ARTICLES ABOUT HOW WE CAN GET THE COUNTRY GOING AGAIN, IF WE DID THOSE THINGS THIS COUNTRY WOULD GET GOING AGAIN AND IT WOULDN'T TAKE FOUR YEARS.

KELLY: JAMIE STOCKS ARE TUMBLING TODAY AND GOLD HAS HIT 1800 DOLLARS OBVIOUSLY THERE IS A LOT OF BEARISHNESS IN THE ECONOMY, YOU GUYS HAVEN'T TELEGRAPHED ABOUT POSSIBLE LAYOFFS AT J.P.MORGAN BUT YOUR ECONOMIST DID SHRINK HIS GDP FORECAST TO 1.5% FOR THE BACK HALF OF THE YEAR LAST WEEK WHAT DO YOU SEE J.P. MORGAN DOING TO GET THROUGH THE SECOND HALF OF THE YEAR? WHAT IS YOU OWN OUTLOOK ON THE NEXT FEW MONTHS, LET ALONE THE NEXT NINE TO 12?

DIMON: WE MAY CUT BACK OUR ADVERTISING A LITTLE BIT TO GET THROUGH THE NEXT -- NO, JUST KIDDING DON'T WANT TO GET YOU SCARED AT CNBC. SO LISTEN, IN CALIFORNIA, 200 NEW BRANCHES, 4,000 NEW EMPLOYEES. WE AREN'T GOING TO STOP OPENING BRANCHES BECAUSE THE MARKET IS DOWN 500 POINTS. OBVIOUSLY COMPANIES TRIM THEIR SALES IF THERE IS NOT GOING TO BE DEMAND OR SOMETHING IS GOING ON. WE ARE STILL ADDING 20 SITES INTERNATIONALLY. RESEARCH, SALES, TRADING. COMMERCIAL MORTGAGE BACK. WE ARE COVERING MORE AND MORE CLIENTS. I THINK WE WILL ADD 500 BANKERS IN CALIFORNIA ALONE TO SERVICE SMALL BUSINESS AND MIDDLE MARKET. WE ARE NOT GOING TO STOP THAT. EVEN IF THERE IS RECESSION. SO SIX MONTHS FROM NOW, THINGS GET MUCH WORSE, YEAH WE TIGHTEN UP SOMEWHERE. BUT WE WON'T STOP INFRASTRUCTURE INVESTMENT, NETWORKS, DATA CENTER, TECHNOLOGY.

FRANCIS: ARE YOU NOT GOING TO CHARGE FOR DEPOSITS YOU THINK BANK OF NEW YORK DOING THAT NOW. IS THAT SOMETHING YOU ARE GOING TO DO DOWN THE LINE.

DIMON: WE ARE NOT PLANNING TO CHARGE FOR DEPOSITS BUT I CAN'T FORECAST THE FUTURE ENVIRONMENT VERY MUCH.

KELLY: JAMIE, JUST ONE OTHER QUESTION ON EUROPE, WHEN IT COMES TO COUNTER-PARTY RISKS WITH EUROPEAN FINANCIAL, YOU TALK ABOUT THE EXPOSURE, BUT ON THE TRADING SIDE, ARE YOU INCREASING HAIRCUTS. ARE YOU LOWERING THE SCREEN WHERE A CREDIT RISK OFFICER HAS TO COME IN TO APPROVE A CERTAIN TRADE. ANY CHANGES TO BUSINESS THERE AND DO YOU SEE ANY IN THE NEAR FUTURE.

DIMON: I WOULD SAY WE ARE CAUTIOUS BUT THERE ARE NO REAL CHANGES TO REPOs, HAIR CUTS, MARKS, OR HOW WE DO CREDIT WITH CLIENTS. SO WE'RE ALWAYS CAUTIOUS, PRUDENT ALL THE TIME. WE ARE MAKING LOANS THE SAME WAY TODAY AS YESTERDAY AND THE DAY BEFORE. BUT YOU MENTIONED SOMETHING VERY IMPORTANT. THE HAIR CUTS, WHAT I CALL THE INNER COMBUSTION ENGINE OF THE MARKETS, WE SEE THAT AS HEALTHY AND NO ONE HAS DONE ANYTHING DRAMATIC. BY THE WAY THE FINANCIAL SYSTEM IS FAR HEALTHIER THAN IT WAS REPO DOES NOT FINANCE THINGS NOW THAT IT DID THREE YEARS AGO. HAIR CUTS ARE MUCH HIGHER THAN THREE YEARS AGO. THINGS ARE NOT LIKE THEY WERE THREE OR FOUR YEARS AGO.

FRANCIS: WHAT IS YOUR BOTTOM LINE MESSAGE TO INVESTORS OUT THERE?

DIMON: LOOK, I REPRESENT ONE COMPANY AND ONE STOCK. I AGREE WITH SOME OF THE HEAD WINDS AGAINST BANKS FOR EXAMPLE, BUT SOME OF THE HEAD WINDS WILL DISAPPEAR OVER TIME. SO IF YU ARE A LONGER TERM INVESTOR YOU SHOULD TRY TO ANTICIPATE THE DISAPPEARANCE OF THE HEAD WINDS. WILL BANKS BE ABLE TO ADJUST TO THAT? AT THE END OF THE DAY WE WILL MAKE GOOD MONEY FOR CLIENTS. HAVE A LOT MORE CLIENTS AND LOCATIONS SERVING PEOPLE AROUND THE WORLD. I SAW JIM CRAMER ON TV THIS MORNING. JIM, HOW ARE YOU? TALKING ABOUT WHY ISN'T A COMPANY LIKE J.P. MORGAN OR OTHERS USING THIS OPPORTUNITY TO EXPAND? WE DO. SO DO A LOT OF OTHER COMPANIES OUT THERE. I THINK WHAT I SAY FOR A LOT OF BUSINESSES ARE DOING, SO ARE TONS OF THE PEOPLE I SPEAK TO. ON THIS TRIP WE VISITED A SMALL BUSINESS WHERE WE BOTH LENT THE MONEY AND DID A MEZZANINE LOAN. THEY ARE GROWING, EXPANDING, I THINK THEY WERE IN FIVE STATES, THEY ARE GOING INTO TWO OR THREE MORE STATES. THAT'S AMERICA THERE ARE A HUNDREDS OF THOUSANDS OF THOSE COMPANIES. HUNDREDS OF THOUSANDS. WE WILL BUILD THIS BUSINESS. AND I GUARANTEE YOU IN FIVE YEARS THE STOCK WILL BE HIGHER THAN TODAY.

FRANCIS: JAMIE DIMON, THANK YOU SO MUCH. WE APPRECIATE IT.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD+, CNBC is the recognized world leader in business news providing real-time data, analysis and information to more than 390 million homes worldwide. The network's 16 live hours a day of business programming in North America (weekdays from 4:00 a.m.- 8:00 p.m.) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC.com and CNBC Mobile Web (mobile.cnbc.com) offer real-time stock quotes, charts, analysis and both on-demand and live streaming video.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://www.nbcumv.com/mediavillage/networks/cnbc/