Ceo Letter To Shareholders 2023

Dear Fellow Shareholders,
Jamie Dimon,
Chairman and
Chief Executive
Officer
Across the globe, 2023 was yet another year of significant challenges, from the
terrible ongoing war and violence in the Middle East and Ukraine to mounting
terrorist activity and growing geopolitical tensions, importantly with China. Almost
all nations felt the effects last year of global economic uncertainty, including higher
energy and food prices, inflation rates and volatile markets. While all these events
and associated instability have serious ramifications on our company, colleagues,
clients and countries where we do business, their consequences on the world at large
— with the extreme suffering of the Ukrainian people, escalating tragedy in the Middle
East and the potential restructuring of the global order — are far more important.
As these events unfold, America’s global leadership role is being challenged outside
by other nations and inside by our polarized electorate. We need to find ways to put
aside our differences and work in partnership with other Western nations in the name
of democracy. During this time of great crises, uniting to protect our essential
freedoms, including free enterprise, is paramount. We should remember that
America, “conceived in liberty and dedicated to the proposition that all men are
2
created equal,” still remains a shining beacon of hope to citizens around the world.
JPMorgan Chase, a company that historically has worked across borders and
boundaries, will do its part to ensure that the global economy is safe and secure.
In spite of the unsettling landscape, including last year’s regional bank turmoil, the
U.S. economy continues to be resilient, with consumers still spending, and the
markets currently expect a soft landing. It is important to note that the economy is
being fueled by large amounts of government deficit spending and past stimulus.
There is also a growing need for increased spending as we continue transitioning to
a greener economy, restructuring global supply chains, boosting military expenditure
and battling rising healthcare costs. This may lead to stickier inflation and higher
rates than markets expect. Furthermore, there are downside risks to watch.
Quantitative tightening is draining more than $900 billion in liquidity from the system
annually — and we have never truly experienced the full effect of quantitative
tightening on this scale. Plus the ongoing wars in Ukraine and the Middle East
continue to have the potential to disrupt energy and food markets, migration, and
military and economic relationships, in addition to their dreadful human cost. These
significant and somewhat unprecedented forces cause us to remain cautious.
2023 was another strong year for JPMorgan Chase, with our firm generating record
revenue for the sixth consecutive year, as well as setting numerous records in each
of our lines of business. We earned revenue in 2023 of $162.4 billion1 and net income
of $49.6 billion, with return on tangible common equity (ROTCE) of 21%, reflecting
strong underlying performance across our businesses. We also increased our
quarterly common dividend of $1.00 per share to $1.05 per share in the third quarter
of 2023 — and again to $1.15 per share in the first quarter of 2024 — while continuing
to reinforce our fortress balance sheet. We grew market share in several of our
businesses and continued to make significant investments in products, people and
technology while exercising strict risk disciplines.
Throughout the year, we demonstrated the power of our investment philosophy and
guiding principles, as well as the value of being there for clients — as we always are —
in both good times and bad times. The result was continued growth broadly across
the firm. We will highlight a few examples from 2023: Consumer & Community
Banking (CCB) extended its #1 leadership positions and grew share year-over-year in
retail deposits, credit card sales and credit card outstandings (adding close to 3.6
million net new customers to the franchise); the Corporate & Investment Bank (CIB)
1 Represents managed revenue.
3
maintained its #1 rank in both Investment Banking and Markets and gained more
than 100 basis points of Investment Banking market share; Commercial Banking (CB)
added over 5,000 new relationships (excluding First Republic Bank), roughly doubling
the prior year’s achievement; and Asset & Wealth Management (AWM) saw record
client asset net inflows of $490 billion, over 20% higher than its prior record.
In 2023, we continued to play a forceful and essential role in advancing economic

growth. In total, we extended credit and raised capital totaling $2.3 trillion for our
consumer and institutional clients around the world. On a daily basis, we move nearly
$10 trillion in over 120 currencies and more than 160 countries, as well as safeguard
over $32 trillion in assets. By purchasing First Republic Bank, we brought much-
needed stability to the U.S. banking system while allowing us to give a new, secure
home to over half a million First Republic customers.
As always, we hold fast to our commitment to corporate responsibility, including

helping to create a stronger, more inclusive economy — from supporting work skills
training programs around the world to financing affordable housing and small
businesses to making investments in cities like Detroit that show how business and
government leaders can work together to solve problems.
We have achieved our decades-long consistency by adhering to our key principles and
strategies (see sidebar on Steadfast Principles on page 5), which allow us to drive
good organic growth and promote proper management of our capital (including
dividends and stock buybacks). The charts on pages 9–15 show our performance
results and illustrate how we have grown our franchises, how we compare with our
competitors and how we look at our fortress balance sheet. Please peruse them and
the CEO letters in this Annual Report, all of which provide specific details about our
businesses and our plans for the future.
I remain proud of our company’s resiliency and of what our hundreds of thousands of
employees around the world have achieved, collectively and individually. Throughout
these challenging past few years, we have never stopped doing all the things we should
be doing to serve our clients and our communities. As you know, we are champions of
banking’s essential role in a community — its potential for bringing people together, for
enabling companies and individuals to attain their goals, and for being a source of
strength in difficult times. I often remind our employees that the work we do matters
4
STEADFAST PRINCIPLES WORTH REPEATING (AND ONE NEW ONE)
Looking back on the past two+ decades — Third, while we don’t run the company Sixth, and this is the new one, we must be
starting from my time as Chairman and worrying about the stock price in the short a source of strength, particularly in tough
CEO of Bank One in 2000 — there is one run, in the long run we consider our stock times, for our clients and the countries in
common theme: our unwavering dedica- price a measure of our progress over time. which we operate. We must take seriously
tion to help clients, communities and This progress is a function of continual our role as one of the guardians of the
countries throughout the world. It is clear investments in our people, systems and world’s financial systems.
that our financial discipline, constant products, in good and bad times, to build
Seventh, we operate with a very important
investment in innovation and ongoing our capabilities. These important invest-
silent partner — the U.S. government —
development of our people have enabled ments will also drive our company’s future
noting as my friend Warren Buffett points
us to achieve this consistency and com- prospects and position it to grow and
out that his company’s success is predi-
mitment. In addition, across the firm, we prosper for decades. Measured by stock
cated upon the extraordinary conditions
uphold certain steadfast tenets that are performance, our progress is exceptional.
our country creates. He is right to say to
worth repeating. For example, whether looking back 10
his shareholders that when they see the
years or even farther to 2004, when the
First, our work has very real human American flag, they all should say thank
JPMorgan Chase/Bank One merger took
impact. While JPMorgan Chase stock is you. We should, too. JPMorgan Chase is a
place, we have outperformed the Standard
owned by large institutions, pension healthy and thriving company, and we
& Poor’s 500 Index and the Standard &
plans, mutual funds and directly by single always want to give back and pay our fair
Poor’s Financials Index.
investors, in almost all cases the ultimate share. We do pay our fair share — and we
beneficiaries are individuals in our com- Fourth, we are united behind basic princi- want it to be spent well and have the
munities. More than 100 million people in ples and strategies (you can see the prin- greatest impact. To give you an idea of
the United States own stocks; many, in ciples for How We Do Business on our where our taxes and fees go: In the last 10
one way or another, own JPMorgan Chase website and our Purpose statement in my years, we paid more than $46 billion in
stock. Frequently, these shareholders are letter from last year) that have helped federal, state and local taxes in the United
veterans, teachers, police officers, fire- build this company and made it thrive. States and over $22 billion in taxes outside
fighters, healthcare workers, retirees, or These allow us to maintain a fortress bal- of the United States. Additionally, we paid
those saving for a home, education or ance sheet, constantly invest and nurture the Federal Deposit Insurance Corporation
retirement. Often, our employees also talent, fully satisfy regulators, continually over $10 billion so that it has the resources
bank these shareholders, as well as their improve risk, governance and controls, to cover failure in the American banking
families and their companies. Your man- and serve customers and clients while sector. Our partner — the federal govern-
agement team goes to work every day lifting up communities worldwide. This ment — also imposes significant regula-
recognizing the enormous responsibility philosophy is embedded in our company tions upon us, and it is imperative that we
that we have to all of our shareholders. culture and influences nearly every role meet all legal and regulatory require-
in the firm. ments imposed on our company.
Second, shareholder value can be built
only if you maintain a healthy and vibrant Fifth, we strive to build enduring busi- Eighth and finally, we know the founda-
company, which means doing a good job nesses, which rely on and benefit from one tion of our success rests with our people.
of taking care of your customers, employ- another, but we are not a conglomerate. They are the front line, both individually
ees and communities. Conversely, how This structure helps generate our superior and as teams, serving our customers and
can you have a healthy company if you returns. Nonetheless, despite our best communities, building the technology,
neglect any of these stakeholders? As we efforts, the walls that protect this com- making the strategic decisions, managing
have learned over the past few years, pany are not particularly high — and we the risks, determining our investments
there are myriad ways an institution can face extraordinary competition. I have and driving innovation. However you view
demonstrate its compassion for its written about this reality extensively in the the world — its complexity, risks and
employees and its communities while still past and cover it again in this letter. We opportunities — a company’s prosperity
strengthening shareholder value. recognize our strengths and vulnerabili- requires a great team of people with
ties, and we play our hand as best we can. guts, brains, integrity, enormous capabili-
ties and high standards of professional
excellence to ensure its ongoing success.
5
MAPPING OUR PROGRESS AND MILESTONES
2000 2005 2010 2015 2020 2024
2000 2006 2010 2016 2020

Jamie Dimon joins Bank JPMorgan Chase holds JPMorgan Chase JPMorgan Chase JPMorgan Chase
One as Chairman and first Investor Day launches Chase Wealth becomes the biggest announces its $30 billion
CEO Management bank in the world by Racial Equity Commitment
Asset & Wealth market capitalization
Chase Manhattan buys Management assets With the goal of helping
J.P. Morgan & Co., under management 2011 to close the racial
forming J.P. Morgan exceed $1 trillion JPMorgan Chase ranks 2018 wealth gap and advance
Chase & Co. economic inclusion among
#1 in Markets revenue Chase credit and debit historically underserved U.S.
2008 market share for the card sales volume communities, the eﬀort
2004 JPMorgan Chase acquires
first time surpasses $1 trillion reported over $30 billion in
progress by the end of 2023.
Bank One merges with Bear Stearns and Jamie Dimon holds his JPMorgan Chase
J.P. Morgan Chase & Co. Washington Mutual first bus tour from announces $30 million
Seattle to San Diego investment in Greater Jamie Dimon returns to
The collapse of the housing Paris, followed by $70 work in the office in June
and mortgage markets led to JPMorgan Chase million in new commit-
a severe worldwide financial becomes the biggest Four modern, private
ments in 2023 to create cloud-based North
crisis, the worst since the U.S. bank by assets
Great Depression. JPMorgan economic opportunity American data centers
Chase helped stabilize the across France go live
markets by acquiring two 2012 JPMorgan Chase
failing institutions, Bear
Stearns and Washington Chase becomes #1 announces branch 2021
Mutual (WaMu). WaMu credit card issuer based expansion initiative
on outstandings JPMorgan Chase ranks
is still the largest failure
of an insured depository
#1 in retail deposits
institution in the history of 2019 market share at 10%
the FDIC. Importantly, the 2014 JPMorgan Chase launches
based on FDIC data,
WaMu deal expanded the JPMorgan Chase makes with deposits surpassing
the Second Chance hiring
bank’s network by more
historic investment in $1 trillion
initiative, helping remove
than 2,200 branches,
including gaining a footprint
Detroit, which reached barriers to employment
in California and Florida. $200 million in 2022 opportunities for people 2022
with a criminal record
JPMorgan Chase Chase becomes
begins using artificial the first bank with
JPMorgan Chase ranks
intelligence and machine nationwide branches
#1 in investment banking
learning for fraud in all lower 48 states
fees market share for
detection
the first time
2023
JPMorgan Chase
acquires First Republic
Bank from the FDIC
The purchase of First

Republic helped stabilize
and strengthen the U.S.
financial system in a time
of crisis while allowing
JPMorgan Chase to give a
new, secure home to over
half a million First Republic
customers.
FDIC = Federal Deposit Insurance Corporation
6
and has impact. United by our principles and purpose, we help people and institutions
finance and achieve their aspirations, lifting up individuals, homeowners, small
businesses, larger corporations, schools, hospitals, cities and countries in all regions
of the world. What we have accomplished in the 20 years since the Bank One and
JPMorgan Chase merger is evidence of the importance of our values.
CELEBRATING THE 20TH ANNIVERSARY OF THE BANK ONE/JPMORGAN CHASE

MERGER
J.P. Morgan Chase

By 2004, J.P. Morgan Chase already represented the consolidation of four of the 10
largest U.S. banks from 1990: The Chase Manhattan Corp., Manufacturers Hanover,
Chemical Banking Corp. and, most recently, J.P. Morgan & Company. And some of their
predecessor companies stretched back into the 1800s, one even into the late 1700s.
Bank One
Bank One had been even busier on the acquisition front, especially across the United
States. By 1998, then Banc One had more than 1,300 branches in 12 states when it
announced a merger with First Chicago NBD, a Chicago-based bank created just
three years earlier by the merger of First Chicago and Detroit-based NBD. Now
headquartered in Chicago, the new Bank One became the largest bank in the
Midwest, second largest among credit card companies and fourth largest in the
United States. But the merger didn’t go as planned, with Bank One issuing three
different earnings warnings. In March 2000, Bank One reached outside its executive
ranks, and my tenure began as Chairman and CEO, working to overhaul the company
and help bring it back to profitability and growth.
The story begins ... A merger 20 years ago helped transform two giant banks
Fast forward to 2003, and another wave of consolidation was well underway in U.S.
banking. Most of the nation’s larger banks were trying to position themselves to be an
“endgame winner.” In the biggest deal, Bank of America agreed to buy FleetBoston
Financial Corp. for more than $40 billion. Those two banks — already amalgamations
of several predecessor companies — touted the breadth of their combined retail
branch network.
7
But they were hardly alone. In 2003, some 215 deals were announced among
U.S. commercial banks and bank holding companies for a total value of $66 billion,
according to Thomson Financial, which tracks merger data.
In July 2004, J.P. Morgan Chase and Bank One merged — as part of a 225-year
journey — to form this exceptional company of ours: JPMorgan Chase. At its merger
in 2004, the combined bank was the fourth largest bank in the world by market
capitalization. But with patient groundwork over the years — fixing systems and
upgrading technology, managing the notable acquisitions of Bear Stearns and
Washington Mutual (WaMu) and continuing to reinvest, including in our talent —
we have made our company an endgame winner.
In earlier years, banks worried about their survival. While the past two decades have
brought some virtually unprecedented challenges, including the great financial crisis
and a pandemic followed by a global shutdown, they did not stop us from
accomplishing extraordinary things. Our bank has now emerged as the #1 bank by
market capitalization.
Each of our businesses is among the best in the world, with increased market share,
strong financial results and an unwavering focus on serving our clients, communities
and shareholders with distinction and dedication. The strengths that are embedded in
JPMorgan Chase — the knowledge and cohesiveness of our people, our long-standing
client relationships, our technology and product capabilities, our presence in more
than 100 countries and our unquestionable fortress balance sheet — would be hard to
replicate. Crucially, the strength of our company has allowed us to always be there for
clients, governments and communities — in good times and in bad times — and this
strength has enabled us to continually invest in building our businesses for the future.
You can see from the following charts what gains and improvements we have
achieved along the way.
8
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Earnings, Diluted Earnings per Share and Return on Tangible Common Equity
2005–2023
($ in billions, except per share and ratio data)
$48.3
$49.6
Net income
excluding reserve
release/build1
$16.23

$38.4
$39.1
$37.7
$36.4
Adjusted net income2 $15.36

$32.5

$12.09
$10.72 $29.1
$26.9
$9.00
$24.4 $24.7 $24.4

24% $8.88
$21.3 $21.7 23%
22%
21%

18%
$19.0
$17.9 $6.19
$17.4 $6.00
15%
19%

$15.4 13% $6.31
11%
17%
15% $14.4 10% 15% 15%
13% 13% 14%
$5.19 $5.29 12%

$11.7
$4.48 $4.34

$8.5 $4.33 6% $3.96

$4.00

$2.35 $5.6 $2.26

$1.35
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Net income Diluted earnings per share (EPS) Return on tangible common equity (ROTCE) Adjusted ROTCE excluding
ROTCE2 reserve release/build1
1 Effective January 1, 2020, the Firm adopted the Financial Instruments - Credit Losses accounting guidance. Firmwide results was 13.6% was 19.3% for 2020
excluding the net impact of reserve release/(build) of ($9.3) billion and $9.2 billion for the years ending
for 2017 and 18.5% for 2021
December 31, 2020 and 2021, respectively, are non-GAAP financial measures.
2 Adjusted net income excludes $2.4 billion from net income in 2017 as a result of the enactment of the Tax Cuts and Jobs Act.
GAAP = Generally accepted accounting principles
9
24_JD_TBVPS_03
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Tangible Book Value1 and Average Stock Price per Share

2005–2023
High: $170.69
Low: $123.11
$155.61
$144.05
$113.80 $128.13
$110.72
$106.52
$92.01
4/7/24r1 3:00pm
$86.08
$63.83 $65.62
24_JD_Stock_Total_Return_03 $58.17
$71.53 $73.12
$66.11
$51.88 $60.98
$47.75 $56.33
$43.93
$39.83 $40.36 $39.36 $39.22 $51.44 $53.56
$36.07 $35.49 $48.13
$44.60
$38.68 $40.72
$33.62
$30.12
$27.09
$21.96 $22.52
$18.88
$16.45
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Tangible book value Average stock price
1 10% compound annual growth rate since 2005.
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Stock total return analysis
Bank One S&P 500 Index S&P Financials Index
Performance since becoming CEO of Bank One

(3/27/2000—12/31/2023)1
Compounded annual gain 12.1% 6.9% 4.9%
Overall gain 1,400.7% 389.7% 209.7%
JPMorgan Chase S&P 500 Index S&P Financials Index
Performance since the Bank One and JPMorgan Chase merger

(7/1/2004—12/31/2023)
Compounded annual gain 10.9% 9.8% 4.7%
Overall gain 647.3% 514.7% 146.7%
Performance for the period ended December 31, 2023

Compounded annual gain
One year 30.7% 26.3% 12.1%
Five years 15.2% 15.7% 12.0%
Ten years 14.4% 12.0% 10.0%
This chart shows actual returns of the stock, with dividends reinvested, for heritage shareholders of Bank One and JPMorgan Chase vs. the Standard & Poor’s
500 Index (S&P 500 Index) and the Standard & Poor’s Financials Index (S&P Financials Index).
1 On March 27, 2000, Jamie Dimon was hired as CEO of Bank One.
10
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Client Franchises Built Over the Long Term

2005 2013 2022 2023
Average deposits ($B) 1

$187 $453 $1,163 $1,127  Serve 82 million U.S. consumers and 6.4 million
Deposits market share2 4.5% 7.5% 10.9% 11.3% small businesses
# of top 50 markets where  67 million active digital customers8, including
we are #1 (top 3) 6 (12) 7 (22) 11 (25) 12 (26) 54 million active mobile customers9
Business Banking primary market  Primary bank relationships for ~80% of
share3 4.0% 6.8% 9.3% 9.5% consumer checking accounts
Client investment assets ($B)1 NA $189 $647 $951  #1 retail deposit share
Consumer & Total payments volume ($T)4 NA $1.4 $5.6 $5.9  #1 deposit market share position in 4 out of the
Community % of digital non-card payments5 ~20% 45% 77% 79% 5 largest banking markets in the country (NY, LA,
Banking Credit card sales ($B) $225 $419 $1,065 $1,164 Chicago, and San Francisco), while maintaining
Debit card sales ($B) NA $224 $491 $515 branch presence in all contiguous 48 U.S. states
Debit and credit card sales volume ($B) NA $664 $1,555 $1,679  #1 primary bank for U.S. small businesses
Credit card sales market share6 15% 21% 22% 23%  #1 U.S. credit card issuer based on sales and
Credit card loans ($B, EOP) $142 $128 $185 $211 outstandings10
Credit card loans market share7 19% 17% 17% 17%  #1 owned mortgage servicer11
Active mobile customers (M) NA 15.6 49.7 53.8  #1 bank auto lender12
# of branches 2,641 5,630 4,787 4,897
# of advisors1 NM 3,044 5,029 5,456
2006  >90% of Fortune 500 companies do business

Total Markets revenue13 #8 #1 #1 #1 with us
Market share13 6.3% 9.0% 11.5% 11.4%  Presence in over 100 markets globally
FICC13 #7 #1 #1 #1  #1 in global investment banking fees for the 15th
Market share13 7.0% 9.6% 10.8% 11.0% consecutive year14
Equities13 #8 #3 #1 #2  Consistently ranked #1 in Markets revenue since
Market share13 5.0% 7.9% 12.9% 12.3% 201113
Corporate & Global investment banking fees14 #2 #1 #1 #1  J.P. Morgan Research ranked as the #1 Global
Investment Market share14 8.7% 8.7% 7.8% 8.8% Research Firm, #2 Global Equity Research Team
Bank Assets under custody (AUC) ($T) $10.7 $20.5 $28.6 $32.4 and #1 Global Fixed Income Research Team18
Average client deposits ($B)15 $155 $384 $687 $645  #1 in USD payments volume19
Firmwide Payments revenue ($B)16 $4.9 $7.8 $13.9 $18.2  27.1% USD SWIFT market share20
Firmwide Payments revenue rank  #1 in U.S. Merchant volume processing21
(share)17 NA NA #1 (8.1%) Co-#1 (9.0%)  #3 Custodian globally by revenue22
Firmwide average daily security
purchases and sales ($T) NA NA $3.1 $3.0
# of top 75 MSAs with dedicated teams23 36 52 69 72  151 locations across the U.S. and 39 international
# of bankers 1,208 1,242 2,360 2,888 locations, with 16 new cities added in 2023
New relationships (gross) 24 NA NA 2,277 4,940  $2.2B revenue from Middle Market expansion
Average loans ($B) $48.1 $132.0 $223.7 $268.3 markets, up 45% YoY
Average deposits ($B) $66.1 $198.4 $294.2 $267.8  Credit, banking and treasury services to ~34K
Commercial Gross investment banking revenue ($B) 25 $0.6 $1.7 $3.0 $3.4 Commercial & Industrial clients and ~36K real
Banking Multifamily lending26 #29 #1 #1 #1 estate owners and investors
 18 specialized industry coverage teams
 #1 overall Middle Market Bookrunner in the U.S.27
 Approximately 28,000 incremental affordable
housing units financed in 202328
JPMAM LT funds AUM performed  166 funds with a 4/5 star rating34
above peer median (10Y)29 NA 80% 90% 83%  Business with 59% of the world’s largest pension
Client assets ($T) 30 $1.1 $2.3 $4.0 $5.0 funds, sovereign wealth funds and central banks
Traditional assets ($T) 30,31 $1.0 $1.9 $3.4 $4.4  #2 in 5-year cumulative net client asset flows35
Alternatives assets ($B) 30,32 $74 $207 $372 $411  Positive client asset flows in 2023 across all
Asset & Wealth Average deposits ($B) 30 $42 $135 $261 $216 regions and channels, with strength in liquidity,
Management Average loans ($B) 30 $27 $83 $216 $220 fixed income, equity, custody and brokerage
# of Global Private Bank client advisors 30 1,484 2,512 3,137 3,515  #2 in Active ETF AUM and flows
Global Private Bank (Euromoney)33 #5 #3 #1 #1  #1 in Institutional Money Market Funds AUM36
 54% of Asset Management AUM managed by
female and/or diverse portfolio managers37
NA = Not available USD = U.S. dollar

NM = Not meaningful YoY = Year-over-year
AUM = Assets under management M = Millions
EOP = End of period B = Billions
FICC = Fixed income, currencies and commodities T = Trillions
JPMAM = J.P. Morgan Asset Management K = Thousands
MSA = Metropolitan statistical area
For footnoted information, refer to page 60 in this Annual Report.
11
24_JD_new_renew_04
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New and Renewed Credit and Capital for Our Clients

2005–2023
($ in billions)
$3,186
$288
$331
$2,496
$2,410
$2,357 $227 $2,345
$2,307 $2,265
$2,263 $216
$2,144 $265 $641
$2,102 $258 $333 $205
$2,044 $244
~$1,900 estimated $250
$197 $480
$1,866 $274 $233 $239
$1,820 $399 $262 $226
$430
$326
$252 $615
$1,577 $275 $309 $368
$1,567
$1,494 $463 $440
$222 $590
$312 $252
$243 $281
$167 $1,926
$167 $136 $1,789
$1,693
$1,621 $1,619
$1,519
$1,392 $1,443
$1,264 $1,294 $1,346 $1,329
$1,231
$1,115 $1,158
$1,088
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Corporate clients Small Business, Middle Market and Commercial clients Consumers Government, government-related and nonprofits1
1 Government, government-related and nonprofits available starting in 2019; included in Corporate clients and Small Business, Middle Market and Commercial clients for prior years.
12
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Assets Entrusted to Us by Our Clients

2005–2023
$7,693
$1,095
Deposits and client assets1 $6,950
($ in billions) $6,580
$1,148
$5,926 $1,132 $1,306
$959 $7,693
$1,314
$4,820
$1,209 $1,095
$6,950
$4,227 $4,211 $718 $1,186 $6,580
$3,802
$3,617 $3,740 $3,633 $660 $679 $1,148
$5,292
$844 $5,926 $1,132 $1,306
$3,255 $464 $503 $618
$558 $4,488 $4,240
$3,011 $784 $792
$439
$2,681 $2,811 $398 $861 $757
$959
$3,781
$2,254 $2,424 $372 $824 $722 $1,314
$365 $755 $4,820
$1,935 $221 $3,258 $1,209
$361 $558 $730
$1,662 $214 $573 $4,227 $4,211 $718 $1,186
$2,783 $2,740
$191 $520 $648
$425 $3,802
$2,427
$364 $3,617 $3,740
$2,329 $2,376 $3,633
$2,353 $660 $679
$5,292
$2,061 $844
$1,743 $1,881 $1,883 $3,255 $464 $503 $618
$1,296 $558 $4,488 $4,240
$1,107 $1,513 $1,415 $3,011 $784 $792
$439
$2,681 $2,811 $398 $861 $757 $3,781
$2,254 $2,424 $372 $824 $722
$221 $365 $755
2005 $1,935
2006 2007 2008
$361 2009 2010 $730
2011 2012 2013 2014 2015 2016 2017 2018 $3,258
2019 2020 2021 2022 2023
$558
$1,662 $214 $573
$191 $2,783 $2,740
Client assets Wholesale$648
$520 deposits Consumer deposits
$425 $2,427
$364 $2,329 $2,376 $2,353
$2,061
$1,743 $1,881 $1,883
$1,107 $1,296 $1,513 $1,415
$33.2 $32.4
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$31.0
2020 2021 2022 2023
$28.6
$26.8
Client assets Wholesale deposits Consumer deposits $23.5 $23.2
Assets under custody2 $20.5 $20.5 $19.9 $20.5
$18.8
$15.9 $16.1 $16.9
($ in trillions)
$13.9 $14.9
$13.2
$10.7
$33.2 $32.4
$31.0
$28.6
$26.8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 $23.5
2017 $23.2
2018 2019 2020 2021 2022 2023
$20.5 $20.5 $19.9 $20.5
$18.8
$15.9 $16.1 $16.9
$13.9 $14.9
$13.2
$10.7
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
1 Represents assets under management, as well as custody, brokerage, administration and deposit accounts.
2 Represents activities associated with the safekeeping and servicing of assets.
13
4/7/24r1 3:00pm
24_JD_daily payment_05.eps
DRAFT 4/5/24: TYPESET 4/6/24r2 v. 24_JD_daily payment_05
Daily Payment Volume1 Daily Merchant Acquiring Transactions

(# in millions, average) (# in millions, average)
$9.7T1 average daily

value processed
56.6 124.8
52.6
52.6 113.4
113.4
49.2
49.2
45.7
45.7 102.4
102.4
More than 90.1
90.1
39.3
39.3
37.4
37.4 double 2010 82.4
82.4
34.6
34.6
32.7
32.7 72.1
72.1
62.3
62.3
55.0
55.0
4/7/24r1 3:00pm
n-class_peers_06
2016
2016 2017
2017 2018
2018 2019
2019 2020
2020 2021
2021 2022
2022 2023
2023 2016
2016 2017
2017 2018
2018 2019
2019 2020
2020 2021
2021 2022
2022 2023
2023
1 Based on Firmwide data using regulatory reporting guidelines prescribed by the Federal Reserve for US Title 1 planning purposes; includes internal
settlements, global payments to and through third-party processors and banks, and other internal transfers.
T = Trillions
DRAFT 3/27/24 – TYPESET: 4/7/24r1 v. 24_JD_best-in-class_peers_06
JPMorgan Chase Exhibits Strength in Both Efficiency and Returns When Compared
with Large Peers and Best-in-Class Peers1
Efficiency Returns
Overhead ratio2 ROTCE
JPM 54% JPM 21%

WFC 66% BAC 13%
BAC 67% MS 13%
JPMorgan Chase
C 72% WFC 9%
GS 75% GS 8%
MS 77% C 5%
Efficiency Returns
JPM 2023 Best-in-class peer JPM 2023 Best-in-class all Best-in-class
overhead ratio overhead ratio3 ROTCE banks ROTCE4,6 GSIB ROTCE5,6
Consumer &
50% 50% 38% 28% 28%
Community
COF-DC & CB BAC–CB BAC–CB
Banking
Corporate &
59% 55% 13% 16% 16%
Investment
BAC-GB & GM BAC-GB & GM BAC-GB & GM
Bank
Commercial 35% 39% 20% 19% 19%

Banking FITB WFC–CB WFC–CB
Asset & Wealth 64% 63% 31% 58% 58%

Management NTRS-WM & ALLIANZ-AM MS-WM & IM MS-WM & IM
GSIB = Global systemically important banks

ROTCE = Return on tangible common equity

14
4/7/24r1 3:00pm
24_JD_fortress balance_09
DRAFT 3/4/24 – TYPESET: 4/7/24r1 v. 24_JD_fortress balance_09
Our Fortress Balance Sheet
2005–2023
Tangible Common Equity (Average)1 15.0%

($ in billions)
13.1% 13.1% 13.2%
12.2% 12.1% 12.0% 12.4%
11.6%
11.0% 10.7%
9.8% 10.1% 10.2%
8.8% $230
$203 $204
7.0% 7.3% 7.0% 7.0% $180 $185 $183 $187
$191
$161 $170
$149
$136
$124
$111
$95
$80
$56 $63
$49
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Tangible common equity (average) ($B) CET1 (%) 2 9.0% CAGR

since 2005
Liquid Assets3
($ in billions) 387%
350%
311%
159% 192%
152% 136% 132% 118% 129% 115%
90% 80% 106% 110% 70% 63% 77% 86%
$1,652
$1,437 $1,430 $1,447
$921 $860
$804 $745 $786 $768 $755
$450 $510 $547

$371 $366
$106 $146 $137
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Cash, deposits with banks, and investment securities ($B)4 Liquid assets ($B)
Average loans/Cash, deposits with banks, and investment securities (%) Average loans/Liquid assets (%)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Net income applicable to common
stockholders ($B) $8.5 $14.4 $14.9 $4.7 $8.8 $15.8 $17.6 $19.9 $16.6 $20.1 $22.4 $22.6 $22.6 $30.7 $34.6 $27.4 $46.5 $35.9 $47.8
Capital returned to common

stockholders ($B)5 $8.5 $7.8 $10.3 $6.4 $1.3 $8.3 $10.8 $4.2 $9.2 $9.6 $10.8 $14.4 $22.0 $27.9 $34.0 $16.3 $28.5 $13.2 $19.8
ROTCE (%) 15% 24% 22% 6% 11% 15% 15% 15% 11% 13% 13% 13% 12% 17% 19% 14% 23% 18% 21%
CAGR = Compound annual growth rate

CET1 = Common equity Tier 1
ROTCE = Return on tangible common equity
**FOOTNOTES –MOVED TO BACK PAGE

15
Within this letter, I discuss the following:
INTRODUCTION Page 2
• Summary of our 2023 results and the principles that guide us Page 5
— Steadfast principles worth repeating (and one new one) Page 6
— Mapping our progreess and milestone Page 6
• Celebrating the 20th anniversary of the Bank One/JPMorgan Chase merger Page 7
• Financial performance Page 9
UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY Page 17
• The critical impact of artificial intelligence Page 17
• Our journey to the cloud Page 18
• Acquiring First Republic Bank and its customers Page 18
• Navigating in a complex and potentially dangerous world Page 19
• Our extensive community outreach efforts, including diversity, equity and inclusion Page 21
— What we learned: A five-point action plan to move forward on the climate challenge Page 26
— Powering economic growth in Florida Page 28
• Giving the bank regulatory and supervisory process a serious review Page 30
• Protecting the essential role of market making (trading) Page 33
STAYING COMPETITIVE IN THE SHRINKING PUBLIC MARKETS Page 36
• The pressure of quarterly earnings compounded by bad accounting and bad decisions Page 36
• The hijacking of annual shareholder meetings Page 36
• The undue influence of proxy advisors Page 37
• The benefits and risks of private credit Page 38
• A bank’s strength: Providing flexible capital Page 39
MANAGEMENT LESSONS: THINKING, DECIDING AND TAKING ACTION

— DELIBERATELY AND WITH HEART Page 40
• Benefiting from the OODA loop Page 40
• Decision making and acting (have a process) Page 41
• The secret sauce of leadership (have a heart) Page 42
A PIVOTAL MOMENT FOR AMERICA AND THE FREE WESTERN WORLD:

STRATEGY AND POLICY MATTER Page 44
• Coalescing the Western world — A uniquely American task Page 45

• Strengthening our position with a comprehensive, global economic security strategy Page 47
• Providing strong leadership globally and effective policymaking domestically Page 50
— Manager’s Journal: “A Politician’s Dream Is a Businessman’s Nightmare” Page 52
• Out of the labyrinth, with focus and resolve Page 55
— We should have more faith in the amazing power of our freedoms Page 56
— How we can help lift up our low-income citizens and mend America’s torn social fabric Page 57
16
Update on Specific Issues Facing
Our Company
Each year, I try to update you on some of the most While we are investing more money in our AI capa-
important issues facing our company. First and bilities, many of these projects pay for themselves.
foremost may well be the impact of artificial intel- Over time, we anticipate that our use of AI has the
ligence (AI). potential to augment virtually every job, as well as
impact our workforce composition. It may reduce
While we do not know the full effect or the precise
certain job categories or roles, but it may create
rate at which AI will change our business — or how
others as well. As we have in the past, we will
it will affect society at large — we are completely
aggressively retrain and redeploy our talent to
convinced the consequences will be extraordinary
make sure we are taking care of our employees if
and possibly as transformational as some of the
they are affected by this trend.
major technological inventions of the past several
hundred years: Think the printing press, the steam Finally, as a global leader across businesses and
engine, electricity, computing and the Internet, regions, we have large amounts of extraordinarily
among others. rich data that, together with AI, can fuel better
insights and help us improve how we manage risk
THE CRITICAL IMPACT OF ARTIFICIAL and serve our customers. In addition to making
sure our data is high quality and easily accessible,
INTELLIGENCE
we need to complete the migration of our analyti-
Since the firm first started using AI over a decade cal data estate to the public cloud. These new data
ago, and its first mention in my 2017 letter to platforms offer high-performance compute power,
shareholders, we have grown our AI organization which will unlock our ability to use our data in
materially. It now includes more than 2,000 AI/ ways that are hard to contemplate today.
machine learning (ML) experts and data scientists.
We continue to attract some of the best and Recognizing the importance of AI to our
brightest in this space and have an exceptional business, we created a new position called
firmwide AI/ML and Research department with Chief Data & Analytics Officer that sits on our
deep expertise. Operating Committee.
Elevating this new role to the Operating Committee
We have been actively using predictive AI and ML
level — reporting directly to Daniel Pinto and me —
for years — and now have over 400 use cases in
reflects how critical this function will be going for-
production in areas such as marketing, fraud and
ward and how seriously we expect AI to influence
risk — and they are increasingly driving real busi-
our business. This will embed data and analytics
ness value across our businesses and functions.
into our decision making at every level of the com-
We’re also exploring the potential that generative
pany. The primary focus is not just on the technical
AI (GenAI) can unlock across a range of domains,
aspects of AI but also on how all management can
most notably in software engineering, customer
— and should — use it. Each of our lines of business
service and operations, as well as in general
has corresponding data and analytics roles so we
employee productivity. In the future, we envision
can share best practices, develop reusable solutions
GenAI helping us reimagine entire business work-
that solve multiple business problems, and continu-
flows. We will continue to experiment with these AI
ously learn and improve as the future of AI unfolds.
and ML capabilities and implement solutions in a
safe, responsible way.
U P DATE O N SP ECI F I C I SSU E S FACI N G O U R CO M PA N Y 17

Clearly, AI comes with many risks, which need We invested approximately $2 billion to build four
to be rigorously managed. new, modern, private cloud-based, highly reliable
We have a robust, well-established risk and control and efficient data centers in the United States (we
framework that helps us proactively stay in front have 32 data centers globally). To date, about 50%
of AI-related risks, particularly as the regulatory of our applications run a large part of their pro-
landscape evolves. And we will, of course, continue cessing in the public or private cloud. Approxi-
to work hard with our regulators, clients and sub- mately 70% of our data is now running in the pub-
ject matter experts to make sure we maintain the lic or private cloud. By the end of 2024, we aim to
highest ethical standards and are transparent in have 70% of applications and 75% of data moved
how AI helps us make decisions; e.g., to counter to the public or private cloud. The new data cen-
bias among other things. ters are around 30% more efficient than our exist-
ing legacy data centers. Going to the public cloud
You may already be aware that there are bad can provide 30% additional efficiency if done cor-
actors using AI to try to infiltrate companies’ sys- rectly (efficiency improves when your data and
tems to steal money and intellectual property or applications have been modified, or “refactored,”
simply to cause disruption and damage. For our to enable new cloud services). We have been con-
part, we incorporate AI into our toolset to counter stantly updating most of our global data centers,
these threats and proactively detect and mitigate and by the end of this year, we can start closing
their efforts. some that are larger, older and less efficient.
OUR JOURNEY TO THE CLOUD ACQUIRING FIRST REPUBLIC BANK AND

Getting our technology to the cloud — whether the ITS CUSTOMERS
public cloud or the private cloud — is essential to
The purchase of First Republic Bank was not some-
fully maximize all of our capabilities, including the
thing that we would have done just for ourselves.
power of our data. The cloud offers many benefits:
But the regulators relied on us to step forward (we
1) it accelerates the speed of delivery of new ser-
worked hand in hand with the Federal Reserve, the
vices; 2) it simultaneously reduces the cost of com-
Federal Deposit Insurance Corporation (FDIC) and
pute power and enables, when needed, an extraor-
the U.S. Treasury), and the purchase of First
dinary amount of compute capability — called
Republic helped stabilize and strengthen the U.S.
burst computing; 3) it provides that compute capa-
financial system in a time of crisis.
bility across all of our data; and 4) it allows us to
be able to constantly and quickly adopt new tech- The acquisition of a major company entails a lot of
nologies because updated cloud services are con- complexity. People tend to focus on the financial
tinually being added — more so in the public cloud, and economic outcomes, which is a reasonable
where we benefit from the innovation that all thing to do. And in the case of First Republic,
cloud providers create, than in the private cloud, the numbers look rather good. We recorded an
where innovation is only our own. accounting gain of $3 billion on the purchase, and
we told the world we expected to add more than
Of course, we are learning a lot along the way.
$500 million to earnings annually, which we now
For example, we know we should carefully pick
believe will be closer to $2 billion. However, these
which applications and which data go to the public
results mask some of the true costs. First, approxi-
cloud versus the private cloud because of the
mately one-third of the incremental earning was
expense, security and capabilities required. In
simply deploying excess capital and liquidity, which
addition, it is critical that we eventually use multi-
doesn’t require purchasing a $300 billion bank —
ple clouds to avoid lock-in. And we intend to main-
we simply could have bought $300 billion of
tain our own expertise so that we’re never reliant
assets. Second, as soon as the deal was
on the expertise of others even if that requires
announced, approximately 7,600 of our employees
additional money.
went from working on tasks that would benefit the
future of JPMorgan Chase to working on the
18 UP DATE ON SP ECIF I C I SS U ES FAC I N G O U R CO M PA N Y

merger integration. Overall, the integration We remain wary of economic prognosticating.
involves effectively combining more than 165 While all companies essentially budget on a base
systems (e.g., statement, deposit, accounting and case forecast, we are very careful not to run our
human resources) and consolidating policies, risk business that way. Instead, we look at a range of
reporting, and other various rules and procedures. potential outcomes for which we need to be pre-
We hope to have most of the integration done by pared. Geopolitical and economic forces have an
the middle of 2024. unpredictable timetable — they may unfold over
Fortunately, we were very familiar and comfort- months, or years, and are nearly impossible to put
able with all of the assets we were acquiring from into a one-year forecast. They also have an unpre-
First Republic. What we didn’t take on was First dictable interplay: For example, the geopolitical
Republic’s excessive interest rate exposure — one situation may end up having virtually no effect on
of the reasons it failed — which we effectively the world’s economy or it could potentially be its
hedged within days of the acquisition. determinative factor.
Our people did a great job of respectfully manag- We have ongoing concerns about persistent
ing this transition, knowing that circumstances inflationary pressures and consider a wide
were particularly tough for our new colleagues, range of outcomes to manage interest rate
whom we tried to welcome with open arms. We did exposure and other business risks.
everything we could to redeploy individuals whose Many key economic indicators today continue
jobs were lost because of the merger (we directly to be good and possibly improving, including
hired over 5,000 people). Our approach has always inflation. But when looking ahead to tomorrow,
been to go into an acquisition knowing we can conditions that will affect the future should be
learn things from other teams, and in this case, considered. For example, there seems to be a large
we did: First Republic had done an outstanding job number of persistent inflationary pressures, which
serving high-net-worth clients and venture capital- may likely continue. All of the following factors
ists, and we are developing what is effectively a appear to be inflationary: ongoing fiscal spending,
new business for us following First Republic’s ser- remilitarization of the world, restructuring of
vicing model. We will serve these high-net-worth global trade, capital needs of the new green econ-
clients through a single point of contact, supported omy, and possibly higher energy costs in the future
by a concierge service model, across our distribu- (even though there currently is an oversupply of
tion channels — including more than 20 new gas and plentiful spare capacity in oil) due to a lack
JPMorgan Chase branded branches. of needed investment in the energy infrastructure.
In the past, fiscal deficits did not seem to be
NAVIGATING IN A COMPLEX AND closely related to inflation. In the 1970s and early
POTENTIALLY DANGEROUS WORLD 1980s, there was a general understanding that
inflation was driven by “guns and butter”; i.e.,
In the policy section, we talk about how we may be fiscal deficits and the increase to the money
entering one of the most treacherous geopolitical supply, both partially driven by the Vietnam War,
eras since World War II. And I have written in the led to increased inflation, which went over 10%.
past about high levels of debt, fiscal stimulus, The deficits today are even larger and occurring in
ongoing deficit spending and the unknown effects boom times — not as the result of a recession —
of quantitative tightening (which I am more wor- and they have been supported by quantitative
ried about than most) so I won’t repeat those easing, which was never done before the great
views here. However, the impacts of these geopo- financial crisis. Quantitative easing is a form of
litical and economic forces are large and some- increasing the money supply (though it has many
what unprecedented; they may not be fully under- offsets). I remain more concerned about quantita-
stood until they have completely played out over tive easing than most, and its reversal, which has
multiple years. In any case, JPMorgan Chase must never been done before at this scale.
be prepared for the various potential impacts and
outcomes on our company and our people.

• Engagement makes the world a better place. This approach is integral to what we do, in great
We all should want the world to continue to scale, around the world — and it works. We are
improve. Isolation and lack of engagement do quite clear that whether our efforts are inspired by
not accomplish that goal. While we believe that the goodness of our hearts (as philanthropy or
it makes sense for the United States to push for venture-type investing) or good business, we try
constant improvement around the world — from to measure the actual outcomes.
advocating for human rights to fighting corrup-
It’s also interesting to point out that many of our
tion — this is rarely accomplished through coer-
efforts were spawned from our work around
cion, and, in fact, is enhanced by engagement.
Advancing Black Pathways, Military and Veterans
• We need to be prepared for emerging Affairs, and our work in Detroit. While we’ve
challenges and position ourselves to under- banked Detroit for more than 90 years, our $200
stand them. We created a new role — Head of million investment in its economic recovery over
Asia Pacific Policy and Strategic Competitiveness the last decade demonstrated that investing in
— to focus specifically on key policy issues communities is a smart business strategy. We are
critical to the firm’s (and, in fact, the country’s) one of the largest banks in Detroit, from consumer
competitiveness, such as trade restrictions, banking to investment banking, and it’s quite clear
supply chains and infrastructure. We also cre- that not only did our efforts help Detroit, but they
ated a new strategic security forum to focus on also helped us gain market share. The extent of
emerging and evolving risks, including trade Detroit’s remarkable recovery was recently high-
wars, pandemics, cybersecurity and actual lighted when Moody’s upgraded the city’s credit
wars, to name just a few. rating to investment grade — an extraordinary
achievement just over 10 years after the city filed
OUR EXTENSIVE COMMUNITY the largest municipal bankruptcy in U.S. history.
OUTREACH EFFORTS, INCLUDING For JPMorgan Chase, Detroit was an incubator for
DIVERSITY, EQUITY AND INCLUSION developing models that help us hone how we
deploy our business resources, philanthropic capi-
JPMorgan Chase makes an extraordinary effort as tal, skilled volunteerism, and low-cost loans and
part of our “normal” day-to-day outreach to equity investments, as well as how we identify top
engage with individual clients, small and midsized talent to drive successful business and societal
businesses, large and multinational firms, govern- improvements. I hope that, as shareholders, you
ment officials, regulators and the press in cities all are proud of our focus on promoting opportunity
around the world. This dialogue is part of the nor- for all, both within and outside our organization,
mal course of business but it is also part of build- which includes economic opportunity. Some of our
ing trust and putting down roots in a community. initiatives are listed below.
We believe that companies, and banks in particu- • Business Resource Groups. To deepen our cul-
lar, must earn the trust of the communities and ture of inclusion in the workplace, we have 10
countries in which they operate. We believe — and Business Resource Groups (BRG) across the com-
we are unashamed about this — that it is our obliga- pany to connect more than 160,000 participat-
tion to help lift up the communities and countries in ing employees around common interests, as well
which we do business. We believe that doing so as to foster networking and camaraderie.
enhances business and the general economic Groups welcome anyone — allies and those with
well-being of those communities and countries and shared affinities alike. For example, some of our
also enhances long-term shareholder value. JPMor- largest BRGs are Access Ability (employees with
gan Chase thrives when communities thrive. disabilities and caregivers), Adelante (Hispanic
and Latino employees), BOLD (Black employees),
NextGen (early career professionals), PRIDE
(LGBTQ+ employees) and Women on the Move.

• Engagement makes the world a better place. This approach is integral to what we do, in great
We all should want the world to continue to scale, around the world — and it works. We are
improve. Isolation and lack of engagement do quite clear that whether our efforts are inspired by
not accomplish that goal. While we believe that the goodness of our hearts (as philanthropy or
it makes sense for the United States to push for venture-type investing) or good business, we try
constant improvement around the world — from to measure the actual outcomes.
advocating for human rights to fighting corrup-
It’s also interesting to point out that many of our
tion — this is rarely accomplished through coer-
efforts were spawned from our work around
cion, and, in fact, is enhanced by engagement.
Advancing Black Pathways, Military and Veterans
• We need to be prepared for emerging Affairs, and our work in Detroit. While we’ve
challenges and position ourselves to under- banked Detroit for more than 90 years, our $200
stand them. We created a new role — Head of million investment in its economic recovery over
Asia Pacific Policy and Strategic Competitiveness the last decade demonstrated that investing in
— to focus specifically on key policy issues communities is a smart business strategy. We are
critical to the firm’s (and, in fact, the country’s) one of the largest banks in Detroit, from consumer
competitiveness, such as trade restrictions, banking to investment banking, and it’s quite clear
supply chains and infrastructure. We also cre- that not only did our efforts help Detroit, but they
ated a new strategic security forum to focus on also helped us gain market share. The extent of
emerging and evolving risks, including trade Detroit’s remarkable recovery was recently high-
wars, pandemics, cybersecurity and actual lighted when Moody’s upgraded the city’s credit
wars, to name just a few. rating to investment grade — an extraordinary
achievement just over 10 years after the city filed
OUR EXTENSIVE COMMUNITY the largest municipal bankruptcy in U.S. history.
OUTREACH EFFORTS, INCLUDING For JPMorgan Chase, Detroit was an incubator for
DIVERSITY, EQUITY AND INCLUSION developing models that help us hone how we
deploy our business resources, philanthropic capi-
JPMorgan Chase makes an extraordinary effort as tal, skilled volunteerism, and low-cost loans and
part of our “normal” day-to-day outreach to equity investments, as well as how we identify top
engage with individual clients, small and midsized talent to drive successful business and societal
businesses, large and multinational firms, govern- improvements. I hope that, as shareholders, you
ment officials, regulators and the press in cities all are proud of our focus on promoting opportunity
around the world. This dialogue is part of the nor- for all, both within and outside our organization,
mal course of business but it is also part of build- which includes economic opportunity. Some of our
ing trust and putting down roots in a community. initiatives are listed below.
We believe that companies, and banks in particu- • Business Resource Groups. To deepen our cul-
lar, must earn the trust of the communities and ture of inclusion in the workplace, we have 10
countries in which they operate. We believe — and Business Resource Groups (BRG) across the com-
we are unashamed about this — that it is our obliga- pany to connect more than 160,000 participat-
tion to help lift up the communities and countries in ing employees around common interests, as well
which we do business. We believe that doing so as to foster networking and camaraderie.
enhances business and the general economic Groups welcome anyone — allies and those with
well-being of those communities and countries and shared affinities alike. For example, some of our
also enhances long-term shareholder value. JPMor- largest BRGs are Access Ability (employees with
gan Chase thrives when communities thrive. disabilities and caregivers), Adelante (Hispanic
and Latino employees), BOLD (Black employees),
NextGen (early career professionals), PRIDE
(LGBTQ+ employees) and Women on the Move.

• Women on the Move. At JPMorgan Chase, they across the United States and has hired over
sure are! Women represent 28% of our firm’s 900,000 veterans and military spouses. In 2023,
senior leadership globally. In fact, our major VJM announced the creation of its Advisory
lines of business — CCB, AWM and CIB, which Board, which is composed of 14 corporate lead-
would be among Fortune 1000 companies on ers, to provide strategic direction and oversight
their own — are all run by women (one with a of VJM as it continues to expand its commitment
co-head who is male). More than 10 years ago, a to support economic opportunities for veterans
handful of senior women at the company, on and military spouses, including its goal to hire 2
their own, started this global, firmwide, inter- million veterans and 200,000 military spouses by
nally focused organization called Women on the 2030. JPMorgan Chase alone has hired in excess
Move. It was so successful that we expanded the of 18,000 veterans since 2011 and currently
initiative beyond the company; it now empowers employs more than 3,100 military spouses.
clients and consumers, as well as women
• Creating opportunity for people with disabili-
employees and their allies, to build their
ties. The firm’s Office of Disability Inclusion
careers, grow their businesses and improve
continues to lead strategy and initiatives aimed
their financial health. The Women on the Move
at advancing economic opportunity for people
BRG has more than 70,000 employees globally.
with disabilities. In 2023, we joined lawmakers
• Advancing Black Pathways. This comprehensive and business leaders in Washington, D.C., to
program, which just reached the five-year mark, show support for passage of the Supplemental
focuses on strengthening the economic founda- Security Income (SSI) Savings Penalty
tion of Black communities because we know that Elimination Act. Modernizing the SSI program,
opportunity is not always created equally. The by updating asset limits for the first time in
program does so by, among other accomplish- nearly 40 years, would allow millions of people
ments, helping to diversify our talent pipeline, with disabilities who receive SSI benefits the
providing opportunities for Black individuals to opportunity to build their savings without put-
enter the workforce and gain valuable experi- ting their essential benefits at risk. We also
ence, and investing in the financial success of provided business coaching to more than 370
Black Americans through a focus on financial entrepreneurs with disabilities.
health, homeownership and entrepreneurship.
• Virtual call centers. When we sought to expand
An important part of the program’s work is
our customer service specialists program across
achieved through our investment in Historically
the United States, we turned to Detroit, launch-
Black Colleges and Universities (HBCU). We now
ing our first virtual call center in 2022. Invest-
partner with 18 schools across the United States
ments in Detroit’s workforce development
to boost recruitment connections, expand
infrastructure helped us hire 90 virtual cus-
career pathways for Black students and other
tomer service specialists for a program that
students, and support their long-term develop-
has outperformed many of our traditional call
ment and financial health. As a measure of the
centers around the world. Following this suc-
program’s success, in four years we have made
cess, we expanded our hiring efforts and this
nearly 400 hires into summer and full-time
virtual program to Baltimore to create new jobs
analyst and associate roles at the firm.
that jump-start careers. And now we’re evaluat-
• Military and Veterans Affairs. This firmwide ing the possibility of expanding even further.
effort sponsors recruitment, mentorship and
development programs to support the military
members and veterans working at JPMorgan
Chase. Back in 2011, we joined with 10 other com-
panies to launch the Veteran Jobs Mission (VJM),
whose membership has since grown to more than
300 companies representing various industries

• Entrepreneurs of Color Fund. A critical chal- • JPMorgan Chase Service Corps. Ten years ago,
lenge we have seen in so many communities is we launched the JPMorgan Chase Service Corps
that traditional lending standards render too to strengthen the capacity-building of nonprofit
many entrepreneurs — particularly entrepre- partners. We brought employees from around
neurs of color and those serving these commu- the world to Detroit to assist with its recovery —
nities — ineligible for credit. In response, we from creating a scoring model for a nonprofit to
helped launch the Entrepreneurs of Color Fund helping prioritize neighborhoods for develop-
(EOCF) in Detroit, a lending program designed to ment funding to devising an implementation
help aspiring small business owners gain access plan for an integrated talent management
to critical resources needed for growth that are system. Since that time, the Service Corps has
often not equitably available — capital, technical expanded, with more than 1,500 JPMorgan
assistance and mentorship, among others. Chase employees contributing 100,000 hours
These challenges aren’t unique to Detroit so we to support over 300 nonprofits globally.
worked with community development financial
• Community Centers/Branches and Community
institutions to replicate the EOCF program in
Managers. A local bank branch, especially in a
10 markets across the United States in 2023,
low-income neighborhood, can be successful
deploying more than 2,900 loans and $176
only when it fits the community’s needs. That is
million in capital to underserved entrepreneurs
why over the last several years we have shifted
across the country.
our approach to how we offer access to financial
• Senior business consultants. To help entrepre- health education, as well as low-cost products
neurs and small businesses make the transition and services to help build wealth. Since 2019,
from community lending to accessing capital we have opened 16 Community Center branches,
from traditional financial institutions, we created often in areas with larger Black, Hispanic or
a new job — senior business consultant — to Latino populations, and have plans to open
provide support. Senior business consultants in three more by the end of 2024. These branches
branches that focus on underserved communi- have more space to host grassroots community
ties offer coaching and help business owners events, small business mentoring sessions and
with everything from navigating access to credit financial health seminars, which have been
to managing cash flow to generating effective well-attended — to date, over 400,000 people
marketing. Since 2020, these consultants have have taken advantage of the financial education
mentored more than 5,500 business owners, seminars. In each of these Community Center
helping them improve their operations, grow branches, we hired a Community Manager (who
revenue and network with others in the local acts as a local ambassador) to build relation-
business community. ships with community leaders, nonprofits and
small businesses. The Community Manager
• AdvancingCities. The organizing principles that
concept and practice have become so successful
define the business and community investments
that we have also placed these managers in
we make and how we best achieve an overall
many of our traditional branches in underserved
impact in local economies were heavily influ-
communities. We now have 149 Community
enced by our experience in Detroit. Seeing
Managers throughout our branch network.
Detroit’s comeback begin to take shape several
years ago, we created AdvancingCities to repli- • Work skills development. Detroit showed us
cate this model for large-scale investments to how talent in communities is often overlooked.
other cities around the world. From San Fran- We saw this in the early days of our investment
cisco to Paris to Greater Washington, D.C., we’ve when we visited our partners at Focus: HOPE, a
applied what we learned in Detroit to communi- training program designed to help Detroiters
ties where conditions are opportune for success develop skills for high-demand jobs. Quickly, it
and require deeper investments — where com- became clear that the training and education
munity, civic and business leaders have come system in Detroit was disconnected from
together to solve problems and get results.

employers and their talent needs. By investing We’ve nearly completed our five-year, $30
in programs like Focus: HOPE, we have been billion Racial Equity Commitment — it will now
able to help bridge local skills gaps by training become a permanent part of our business.
people for in-demand jobs in communities like What began in 2020 as a five-year, $30 billion
Dallas, Miami and Washington, D.C. Between commitment is now transforming into a consistent
2019 and 2023, we supported more than 2 mil- business practice for our lines of business in
lion people through our extensive learning and support of Black, Hispanic, Latino and other
career programming around the world. underserved communities. By the end of 2023,
• Increasing our rural investment. We are proud we reported over $30 billion in progress toward
to be the only bank with branches in all 48 con- our original goal. However, our focus is not on how
tiguous states, which include many rural com- much money is deployed — but on long-term
munities. Nearly 17 million consumers living in impact and outcomes. And going forward, these
rural areas hold over $100 billion in deposits programs will be embedded in our business-
with us and $175 billion in loans. We are also a as-usual operating system.
leading wholesale lender in these communities, • Affordable rental housing. Through our
helping to fuel local economies through relation- Affordable Housing Preservation program, we
ships with local companies, governments, hospi- approved program funding to date of approxi-
tals and universities. Since 2019, we have made mately $21 billion in loans to incentivize the
material progress in extending our footprint to preservation of over 190,000 affordable housing
reach more rural Americans, including expand- rental units across the United States. Addition-
ing our branch network into 13 new states with ally, we financed approximately $5 billion for the
large rural populations. Now we are raising the construction and rehabilitation of affordable
bar. With our new strategy, we have a goal to rental housing.
have a branch available to serve 50% of a state’s
population within an acceptable driving dis- • Homeownership. In 2023, we expanded our
tance, including in heavily rural states such as $5,000 Chase Homebuyer Grant program to
Alabama and Iowa. This focus is part of our include over 15,000 majority Black, Hispanic and
recently announced plan to build an additional Latino communities — and in January 2024, we
500 branches and hire 3,500 employees over increased our grant amount to $7,500 in select
the next three years. Through this expansion, markets. Since our grant program began in
we will partner across lines of business and our 2021, we have provided about 8,600 grants
Corporate Responsibility organization to help totaling $43 million. We also have provided
advance inclusive economic growth and bring home purchase and refinance loans in 2023
the full force of the firm to America’s heartland. worth over $4.6 billion for more than 14,000
Black, Hispanic and Latino households across
the economic spectrum.
• Small business. The Business Card Special

Purpose Credit Program, launched in January
2023, has provided over 10,900 cards, totaling
over $43 million in available credit lines to
underserved entrepreneurs and communities
across the United States.

• Supplier diversity. In 2023, our firm spent We want to articulate how we weigh in on
approximately $2.3 billion directly with diverse social issues and what it means for our
suppliers — an increase of 10% over 2022. As a customers.
part of our racial equity commitment, over $450 Before I comment about culture issues, I have a
million was spent in 2023 with more than 190 confession to make: I am a full-throated, red-
Black-, Hispanic- and Latino-owned businesses. blooded, patriotic, free-enterprise (properly regu-
• Minority depository institutions and commu- lated, of course) and free-market capitalist. Our
nity development financial institutions. To company is frequently asked to take a position on
date, we have invested more than $110 million in an issue, rule or legislation that might be consid-
equity in diverse financial institutions and pro- ered “cultural.” When that happens, we take a
vided over $260 million in incremental financing deep breath and study the matter. Many of the
to community development financial institutions laws in question have many specific requirements,
to support communities that lack access to tradi- some of which you would agree with but not oth-
tional financing. JPMorgan Chase also helped ers. But we are being asked to support the entire
these institutions build their capacity so they law. In cases like these, we simply make our own
can provide a greater number of critical services statement that reflects our educated view and val-
like mortgages and small business loans. ues; however, we do not give our voice to others.
We believe in the values of democracy, including

We’re thoughtfully continuing our diversity,
freedom of speech and expression, and are
equity and inclusion efforts.
staunchly against discrimination and hate. We
Of course, JPMorgan Chase will conform as the have not turned away — and will not turn away —
laws evolve. We will scour our programs, our words customers because of their political or religious
and our actions to make sure they comply. affiliations nor would we tell customers how they
should spend their money.
That said, we think all the efforts mentioned
above will remain largely unchanged. And, in fact, Our commitment to these ideals is also reflected in
around the world, cities and communities where our employees. The talent at our firm is a vibrant
we do business applaud these efforts. We also mix of cultures, beliefs and backgrounds. We are,
believe our initiatives make us a more inclusive of course, fully committed to freedom of speech.
company and lead to more innovation, smarter There are things that you can say that would be
decisions and better financial results for us and permitted under freedom of speech but would not
for the economy overall. be allowed under our Code of Conduct. For exam-
ple, we do not allow intimidation, threats or highly
We are often asked in particular about “equity”
prejudicial behavior or speech. Our Code of Con-
and what that word means. To us, it means equal
duct clearly stipulates that certain statements and
treatment, equal opportunity and equal access …
behavior, while allowed under freedom of speech,
not equal outcomes. There is nothing wrong with
can lead to disciplinary action at our company —
acknowledging and trying to bridge social and eco-
from being reprimanded to being fired.
nomic gaps, whether they be around wealth or
health. We would like to provide a fair chance for
everyone to succeed — regardless of their back-
ground. And we want to make sure everyone who
works at our company feels welcome.

WHAT WE LEARNED: A FIVE-POINT ACTION PLAN TO MOVE FORWARD
ON THE CLIMATE CHALLENGE
In May 2023, we gathered with knowledgeable and influential • Public/private partnerships in scaling bankable projects.
people from the energy industry writ large to the government Scaling investments needs to happen both for commercially
and financial services arena in Scottsdale, Arizona, for an proven technologies (e.g., wind and solar) and for emerging
action forum. The goal was to explore various aspects of the technologies (e.g., green hydrogen, sustainable aviation fuel
climate challenge and try to devise effective solutions that and carbon capture). Developing “bankable” clean energy
could help lead to meaningful progress. The climate challenge projects will require the application of smart financial tools,
is immense and complex. Addressing it requires more than as well as further policy support. It will take public/private
making simplistic statements and rules; rather, energy partnerships and innovation to create catalytic forms of
systems and global supply chains need to be transformed capital that can step into these gaps, absorb first-mover
across virtually all industries. And there is also a deep need risks and provide the necessary funding. The cost of capital
for new research and development. Energy systems and is too high for some companies — and public funds ought
supply chains provide the foundation of the global economy to be deployed in a smart way that effectively attracts
and must be treated with care. private capital.
At the same time, the opportunity here is immense. The • Public education and engagement. Without question, clients
investment required to meet climate goals — estimated at over told us that public commitment to and investment in energy-
$5 trillion annually — could generate economywide growth and related infrastructure is one of the most important parts of
opportunity at a scale the world has not seen since the combating the climate crisis and running their businesses.
Industrial Revolution. Supporting the buildout of energy-related infrastructure with
speed and scale is critical. Public acceptance of building and
The task for industry, policymakers and finance is to help
advancing the infrastructure needed to meet climate goals is
formulate solutions that support the transition to a low-carbon
at the heart of progress. While the energy transition is poised
economy, balancing affordable, reliable access to energy with
to deliver benefits to communities across the world, securing
generating economic growth.
acceptance and support to build clean energy infrastructure
To find a way forward, we sought input from diverse at scale is challenging. Access to job-creating renewable
stakeholders in pursuit of a North Star. In Scottsdale and in energy projects can help rural communities thrive by
discussions with clients across industries about what’s needed advancing local economies. Ensuring public support and
to achieve a low-carbon economy, these five action steps and social license to operate requires better engagement
reforms were top of mind: strategies, including widespread stakeholder education about
the benefits of these technologies for local communities.
• Supportive government policy and leadership to advance
the transition. Policy that promotes favorable economic • Communication about concrete successes. Across
conditions to make the transition viable is a critical first step industries, market participants need to do a better job of
for clients. This includes government leadership via celebrating and championing concrete successes and
mandates, incentives or subsidies to support jobs and tangible milestones. This includes highlighting success
investment in the transition; actions on permitting and stories around emerging technologies and the complex
interconnection reform; and regulatory clarity and nature of the carbon transition. Stakeholders also should
certainty, especially around long-term investments. As one better convey the benefits of clean energy — across all
vital example, current grid infrastructure is insufficient to technologies — to help combat misinformation and foster a
accommodate the growth in renewables. more informed dialogue.

• Work skills training. Businesses depend on healthy, thriving We are engaged but recognize our role: three more
communities so the carbon transition needs to work for important points.
everyone. This includes helping to ensure that workers are
First, everyone should understand that conquering the climate
trained in the skills for the future, such as through improved
problem needs proper government action, particularly around
engineering schools and job training programs. Work across
taxes, permitting, grids, infrastructure building and proper
the entire supply chain is essential to moving at pace. As one
coordination of policies — we are not there yet. Second, there is
example, the U.S. Bureau of Labor Statistics estimates we will
no known technology that can fill the gap between our
need more than 70,000 additional electricians per year
“aspirations” and the current trajectory of the world. We hope
through 2031; it is currently unclear how the market will
and believe that this will be found (for example, through carbon
meet that demand. If the deployment of heat pumps and
capture, improved batteries, hydrogen or other measures). This
electric vehicle chargers accelerates, demand for electricians
new technology will also require proper government research
will be even higher. A concerted focus to train electricians
and development funding, as the effort cannot be accomplished
can help the United States meet some of its climate goals
by private enterprise alone. And third, we are going to use the
while providing well-paying jobs that do not require a four-
word “commitment” much more reservedly in the future,
year college degree. Also, broadly speaking, businesses are
clearly differentiating between aspirations we are actively
in a better position to make investments with confidence
striving toward and binding commitments.
when labor requirements across the value chain — from
design and manufacturing to installation — are satisfied. For JPMorgan Chase to play the right role in tackling the
climate challenge, we have organized a special group around
We recently reconsidered certain memberships. the green economy and related infrastructure investment.
JPMorgan Chase recently exited Climate Action 100+ and the This group will coordinate and inform our work across all
Equator Principles. “Why?” we are asked. While we don’t established industry groups (from auto to real estate, energy,
necessarily disagree with some of the principles many agriculture and others) and includes hundreds of employees
organizations have, we make our own business decisions. We devoted to these efforts.
think we have some of the best-in-class environmental, social
and risk standards because we have invested in our own
in-house experts and matured our own risk management
processes over the years. As a result, we are going to go our
own way and make our own independent decisions, gathering
the best learnings of experts in the field, and, of course, we
will follow all legal requirements.

POWERING ECONOMIC GROWTH IN FLORIDA
From Tallahassee to Miami and from Tampa to Palm Bay, Our support to government, higher education, healthcare
JPMorgan Chase has been committed to Florida for more than and nonprofit organizations:
130 years and has enjoyed being the bank for all communities. • We serve over 150 government, higher education, healthcare
Each year, we contribute billions of dollars to the economy, hire and nonprofit clients throughout the state, and over the last
and train local residents, help to revitalize neighborhoods and five years, we have provided more than $20.2 billion in credit
remove barriers to opportunity for Floridians across the state. and capital to them.
Our partnerships with businesses, nonprofits, government
• Our clients range from the city of Jacksonville to the Orlando
entities and community organizations have enabled us to drive
Utilities Commission, the University of South Florida, Broward
sustainable impact and help them achieve their goals. We
Health and the District School Board of Pasco County — a
couldn’t be more proud to help make opportunity happen
decades-long client.
in Florida.
• We are the lead treasury bank for the Wounded Warrior
This year, we forged a relationship with Inter Miami CF, one of
Project, one of the largest veteran service organizations in
the most recognizable sports teams in the world. Through this
the United States. Headquartered in Jacksonville, the
partnership and the newly named Chase Stadium, we’re
organization caters to wounded veterans and service
continuing to contribute to South Florida and its local
members who served in the military on or after 9/11.
communities. In Tampa, home to nearly 6,000 of our
employees, we’re triggering an additional $210 million in Our support to investment and middle-market banking
economic activity and creating over 660 local construction jobs clients:
through the renovation of our Highland Oaks campus and
• Over the last five years, we have provided in excess of $318
downtown Tampa office. We’re proud that one-third of all
billion in credit and capital to local clients, such as utility,
Floridians do business with us through deposits, credit cards or
technology and tourism companies.
a mortgage. Through each of our investments across the state,
we’re ensuring that residents have the resources and tools they • We have more than 12,500 large and midsized clients across
need to thrive. the state.
Our support to local financial firms:

• Over the last five years, we have provided more than $24
billion in credit and capital for financial institutions, such as
local banks, insurance companies, asset managers and
securities firms.
• We bank over 50 of Florida’s regional, midsized and

community banks, helping them play an essential role
in maintaining the state’s economy and serve local
communities.

Our support to small business: Our business and community investments:
• At the end of 2023, balances for loans extended to Florida’s • Over the last five years, we have committed nearly $65
small businesses totaled more than $1.2 billion — funds being million in philanthropic support, including:
used to help those businesses scale and grow, contribute to
— $3 million to The Miami Foundation’s Resilient 305:
the economy and create local jobs.
Building Prosperity Collaborative to increase access to
• Across the state, we have over 654,000 small business quality jobs and develop small businesses through training,
customers. investments and capacity-building.
— $1.6 million to the Community Justice Project, which

• In 2023, our bankers and senior business consultants spent
empowers community-based legal advocates to help delay
more than 375,000 hours advising and supporting Florida
displacement and improve conditions for housing stability
business owners.
for renters across nine Florida counties.
Our support to consumer banking needs: • In 2022, we committed $10 million over five years to Tech
• We operate 1,445 ATMs and 410 branches across the state. Equity Miami to advance equal access to tech skills, careers
and education, including:
• In 2023, we supported more than 6.1 million customers with
mortgages, auto loans and savings, checking and credit card — A $1 million investment to Florida Memorial University,
accounts, giving JPMorgan Chase one of the largest South Florida’s only HBCU, to help traditionally
consumer banking market shares in the state. underresourced students pursue a career in technology.
• We managed more than $70 billion in investment and annuity Our support as a local employer:
assets for local clients. • We employ more than 14,000 residents throughout the state,
including nearly 1,900 veterans and over 660 people with a
criminal background who deserve a second chance.
• In Florida, the average salary of our employees is more than

$87,000 (plus a starting comprehensive annual benefits
package worth nearly $17,600) compared with the statewide
per capita income of nearly $40,300.

GIVING THE BANK REGULATORY AND small banks and big banks serve completely differ-
ent strategic functions. Large banks bank multina-
SUPERVISORY PROCESS A SERIOUS
tional corporations around the world, make
REVIEW healthy markets, and wield technology and a prod-
The Dodd-Frank Wall Street Reform and Consumer uct set that are the best in the world. A small bank
Protection Act (Dodd-Frank) was finished 14 years simply cannot bank these same multinational gov-
ago, and we believe it accomplished a lot of good ernments and safely move the amount of money
things. But it’s been quite a while since then, and and securities that large banks do. Regional and
we’re still debating some very basic issues. It’s community banks have exceptional local knowl-
time to take a serious, hard, honest look at what edge and presence and are critical in serving
has been done and what can be improved. thousands of towns and certain geographies.
It’s good to remember that the United States has It is also important to recognize that the banking
the best financial system in the world, with diversi- system as we know it is shrinking relative to pri-
fied, deep and experienced institutions, from vate markets and fintech, which are growing and
banks, pension plans, hedge funds and private becoming increasingly competitive. And remember
equity to individual investors. It has healthy public that many of these new players do not have the
and private markets, transparency, rule of law and same transparency or need to abide by the exten-
deep research. The best banking system in the sive rules and regulations as traditional banks,
world is a critical part of this, and, integrated with even if they offer similar products — this often
the overall financial system, is foundational to the gives them significant advantage.
proper allocation of capital, innovation and the
To deal with this fluid environment, banks of all
fueling of America’s growth engine.
sizes develop their own strategies, whether to
This is not about JPMorgan Chase — we believe we specialize, expand geographically or embark on
can manage through whatever is thrown our way. mergers and acquisitions. There are certain banking
This is about the impact on all parts of the system services where economies of scale are a competitive
— from smaller banks to larger regional banks that advantage, but not all banks need to become bigger
may not have the resources to handle all of these to gain this benefit (there are many highly success-
regulatory requirements. It’s also about the effect ful banks that are smaller). What is clear is that
on the financial markets and the economy from the banks should be allowed to pursue their individual
rapidly growing shadow banking system, as well as strategies, including mergers and acquisitions, as
the ultimate impact on the customers, clients and they see fit. Overall, this process should be allowed
communities we serve. This is about what’s right to happen — it’s part of the natural and healthy
for the system. course of capitalism — and it can be done without
harming the American taxpayer or economy.
The banking and financial system is
While we all want a strong banking and financial
innovative, dynamic and constantly changing.
system, we should step back and assess how all the
The banking system is not static: There are startup regulatory steps we have taken measure up against
banks, mergers, successful upstarts and fintech the goals we all share. Since Dodd-Frank was signed
banks, and even Apple, which effectively acts as a into law in 2010, thousands of rules and reporting
bank — it holds money, moves money, lends money requirements written by 10+ different regulatory
and so on. Nonbanks are competing with tradi- bodies in the United States alone have been added.
tional banks, and, in general, this dynamism and And it would probably be an understatement to say
churn are good for innovation and invention — with that some are duplicative, inconsistent, procyclical,
success and failure simply part of the robust pro- contradictory, extremely costly, and unnecessarily
cess. Innovation runs across payments systems, painful for both banks and regulators. Many of the
budgeting, digital access, product extensions, risk rules have unintended consequences that are not
and fraud prevention, and other services. Different desirable and have negative impacts, such as
institutions play different roles, and, importantly, increasing the cost of credit for consumers (hurting
lower-income Americans the most).

The whole process, including the Basel III One of the single most important lessons from
endgame, could be much more productive, the great financial crisis is that there is
streamlined, economical, efficient and safe. enormous value to having a bank that is
Both regulators and banks should want the same well-managed and has diverse revenue sources.
thing — a healthy banking system, serving its cli- Yet regulation since then both punishes
ents and striving for continuous improvement. consolidation and diversification — and punishes
We all should also want the enormous benefits that performance — through many features of the
would come from good collaboration between reg- GSIB surcharge.
ulators and bank management teams and boards. • Built over many years, the framework is now
Over time, these relationships have deteriorated, full of duplication. The following is only a par-
and, again, are increasingly less constructive. tial list: American gold-plating and conceptual
There is little real collaboration between practi- inconsistencies among Comprehensive Capital
tioners — the banks — and regulators, who gener- Analysis and Review (CCAR), recovery and reso-
ally have not been practitioners in business. While lution plans, liquidity requirements, global sys-
we acknowledge the dedication of regulators who temically important bank (GSIB) requirements,
work with banks on a daily basis, management and safety and soundness principles. The many
teams across the industry are putting in overlapping rules contribute to the bureaucracy
a disproportionate amount of time addressing that generates an extraordinary amount of
requests for extra details, documentation and make-work (an 80,000-page CCAR and shock-
processes that extend far beyond the actual rules ingly another, coincidentally, 80,000-page
— and distract both regulators and management recovery and resolution plan).
from more critical work. We should be more • The new rules do virtually nothing to fix what
focused on the truly important risks for the safety caused the failure of SVB and First Republic.
of the system. And unfortunately, without collabo- For example, they don’t improve certain liquidity
ration and sufficient analysis, it is hard to be confi- requirements, limit HTM accounting or reduce
dent that regulation will accomplish desired out- allowable interest rate exposure.
comes without undesirable consequences. Instead
of constantly improving the system, we may be • The current regulatory approach to liquidity
making it worse. A few additional points: might simply run counter to the stated intent.
Regulations should recognize the value and
• The Basel III endgame disadvantages importance of lending and borrowing against
American banks. The Basel III endgame has good collateral and using central bank
been 10 years in the making, and it still has not resources, such as the discount window.
been completed. In my view, many of the rules Adhering to current liquidity requirements per-
are flawed and poorly calibrated. If the Basel III manently ties up good liquidity in a way that
endgame were implemented in its current form, makes the system more fragile and more risky.
it would hamper American banks: As proposed,
it would increase our firm’s required capital by • It is not clear what the full intent of the Basel
25%, making our requirement 30% higher than III endgame was — it will have unintended con-
it would be under the equivalent European sequences. Without real analysis of expected
Union proposal. That means for every loan and outcomes, additional regulation will likely
asset financed in the United States by a major reduce the number of banks offering certain
American bank, that bank would have to hold services and increase costs for all market partic-
30% more capital than any international com- ipants and activity, including loans, market
petitor. The proposed regulations would also making and hedging (by farmers, airlines and
damage market making (see the following sec- countries, among others). And new rules might
tion). There are many other flaws but suffice it to even increase consolidation as companies race
say that much of the work being done today to to achieve economies of scale in certain prod-
analyze the effects should have been done ucts and services.
before the proposed rulemaking.

Unfortunately, some recent regulations are ending contagion and restore confidence to depositors,
up in court. You can imagine that no one wants to how liquidity requirements can create more flexi-
sue their regulators. Banks would not sue if they did ble funding for banks under stress, how the bank-
not think they were right — or if they thought they ing and Federal Reserve’s payment system can
had any other recourse — which they effectively do become more interoperable, how clearinghouse
not. This is definitely not what anyone should want. risk can be reduced, how stress tests can protect
A more constructive relationship with regulators the system from a wider variety of outcomes,
would reduce confusion and uncertainty and would how costs and therefore consumer costs can be
lead to better outcomes for banks, their sharehold- reduced (not increased), how anti-money laun-
ers, and their clients, customers and communities. dering requirements can be simplified and
improved at the same time, and how financial
Collaboration between banks and regulators products can be brought to the unbanked.
could improve the use of resources and create
better outcomes. We can fix the housing and mortgage markets.
For example, mortgage regulations around orig-
True collaboration could dramatically improve the
ination, servicing and securitization could be
banking system. For example:
simplified, without increasing risk, in a way that
• Redirect enormous resources from things that would reduce the average mortgage by 70 or 80
don’t matter to things that do. As mentioned, it basis points. The Urban Institute estimates that
takes 80,000 pages to describe a CCAR test and a reduction like this would increase mortgage
80,000 pages to detail recovery and resolution. originations by 1 million per year and help l
The talent and resources at the banks and ower-income households, in particular, buy
regulators could be better used elsewhere. their first home, thereby starting them on the
Such overload is distracting and takes your eye best way to build household net worth.
off the ball on real, emerging risks, including
There are many more things that can be improved
China, trade, payment systems and cybersecu-
— and we really should start working on them.
rity, among others.
• Reduce bureaucratic processes that provoke a We need a detailed review and probably a
tendency to herd mentality. For example, CCAR complete revamp.
is just a point-in-time stress test, and it can lull I know this might be wishful thinking, but now
you into a false sense of security — for refer- would be a good time to step back and have a thor-
ence, we do more than 100 stress tests each ough and candid review of the thousands of new
week. On interest rate exposure, focusing on the rules passed since Dodd-Frank. After this review, we
documentation of details may stop you from should ask what is it that we really want: Do we
thinking about big interest rate exposure. want to try to eliminate the possibility of bank runs?
Sometimes analyzing “what ifs” and fat tail risks Do we want to change and create liquidity rules that
is better than excessive and rigid models and would essentially back most uninsured deposits? Do
documentations. we want the mortgage business and leveraged lend-
ing business to be inside or outside the banking sys-
• Examine risks outside the regulatory system
tem? Do we want products that are inside and out-
that are rarely analyzed and largely unad-
side the banking system to be regulated the same
dressed. These risks include data and privacy,
way? Do we want to reasonably give smaller banks a
as well as consumer banking and payment sys-
leg up in purchasing a failing bank? And while Dodd-
tems, which are growing fast in the unregulated
Frank did some good things, shouldn’t we take a
market. In addition, there are potential risks
look at the huge overlapping jurisdictions of various
from private credit markets (which I talk about
regulators? This overlap creates difficulties, not only
later in this section).
for banks, but for the regulators, too. Any and all of
• Let’s imagine what’s possible with real collabo- this is achievable, and, I believe, could be accom-
ration. Working together, we can improve how plished with simpler rules and guidelines and with-
the FDIC manages failing institutions, how to limit out stifling our critical banking system.

PROTECTING THE ESSENTIAL ROLE OF investments and supporting all sectors of the
economy, including companies, state and local
MARKET MAKING (TRADING)
governments, universities, hospitals, pension plans
Before we discuss market making and financial and overall job creation. Without market making in
markets, readers should understand that market the secondary market, it would be extremely diffi-
making occurs in almost all businesses. There are cult for companies to raise capital through the
healthy markets in farm animals, foreign prod- primary market — equity and debt offerings —
ucts, commodities, energy, logistics, healthcare which have totaled approximately $3.6 trillion on
and so on. Healthy markets increase customer average over the past few years. The incredible
choice and reduce cost. They almost always strength of these markets enables companies of
involve holding inventory and taking some risk, all sizes to grow and expand especially during times
which is simply a part of the process. America’s of volatility and stress. It also enables consumers to
financial markets are the biggest in the world — access cheaper credit and governments (local, state
U.S. public debt and equity markets total $137 and federal) to reduce their borrowing costs.
trillion, constituting the biggest “market” in the
world, and are larger than America’s gross It takes enormous resources to properly
domestic product (GDP) of $27 trillion. support the Markets business.
JPMorgan Chase spends $700 million per year in
Market participants are not “Wall Street.” They are
extensive research coverage of nearly 5,200
large and small, mainly sophisticated, global inves-
companies across 83 countries. This massive effort
tors (pension plans, mutual funds, governments
continuously educates investors and decision
and individuals) representing retirees, veterans,
makers around the world and often leads to
individuals, unions, federal workers and others.
improved governance and management. It also
They all benefit from our efficient, low-cost and
critically complements the firm’s market-making
transparent markets.
activities and further promotes transparency,
Some regulators seem to think that market making enabling investors to make thoughtful choices
is a speculative, hedge fund-like activity — and this around investing in capital markets.
thinking is what might be leading them to con-
I would also like our shareholders to know that
stantly increase capital requirements. The pro-
our market making is backed by approximately
posed capital rules could fundamentally alter
$7 billion in support expenses, including over
market-making activities that are critical to a
$2 billion in technology spend alone each year.
thriving economy, particularly in difficult markets
This investment allows us to maintain global
when market making is even more important.
trading systems and constantly improve upon risk
The new rules would raise capital requirements
management and efficiency.
by 50% for major banks — which could undermine
market stability, make banking services costlier JPMorgan Chase deploys approximately $70 billion
and less accessible, and push even more activity in capital to maintain our Markets franchise. This
to a less regulated banking system. capital supports $500 billion in securities inven-
tory (largely hedged) — and this inventory allows
Our financial system and markets are the best us to buy and sell $2 trillion (notional) in securities
in the world and benefit ALL participants; daily for our clients.
exceptionally good market making in the
secondary market makes our primary markets Market making entails risk but is not
the best in the world. particularly speculative.
We should recognize that the United States has the The main objective of market makers is to continu-
biggest, deepest and most liquid capital markets in ously quote prices and diligently manage an inven-
the world. For these markets to function, it is tory to transact at those prices, which includes
critical for transparency and liquidity to be in the assuming certain risks to support heavy volumes
secondary market. Market making provides this, and orderly trading. Market makers have a moral
promoting the flow of capital to real economy obligation to try to make markets in good times

and in bad. Part of our brand promise is to stand third, in the worst quarter ever in the markets fol-
ready as the willing buyer and seller. In this, we lowing the 2008 failure of Lehman Brothers, we lost
have never failed. In addition, in most cases $1.7 billion, but we made $5.6 billion in Markets rev-
regarding government debt, where we serve as a enue for the full year. The firm as a whole did not
government securities dealer, we are legally obli- lose money in any quarter that year. In 2009, there
gated to make markets. This constant visibility into was a complete recovery in Markets, and we made
prices provided by market makers fosters investor $22 billion in Markets revenue.
confidence, keeps fees low and promotes economic
You can see that our actual performance under
growth by attracting more investors.
extreme stress isn’t even close to the hypothetical
Many large market participants — for example, losses of the stress test.
hedge funds and high-frequency traders, among
Another major fallacy is that derivatives are
others — have no obligation to make markets. In
objects of financial destruction. In reality, deriva-
fact, many of these market participants often “step
tives are an essential part of managing financial
out” of the markets and dramatically reduce liquid-
risk and are used by investors, corporations, farm-
ity specifically when market conditions are difficult.
ers, businesses, countries, governments and oth-
Market making is not particularly speculative since ers to manage their risks. And more than 85% of
market makers generally hedge their positions, as derivatives are fairly basic forms of foreign
you will see from some real life examples of the exchange or interest rate swaps.
economics and risks. We earn revenue of approxi-
One last fallacy is that the repo markets are all
mately $100 million on a typical day. In the aver-
about speculation. While it’s true that repo is used
age year, the total is nearly $30 billion. On our
by certain investors to leverage up their positions,
$2 trillion in notional daily trading, this amounts to
about 75% of repo is essential to normal money
only one hundredth of a cent charged to the inves-
market functioning, i.e., is done by broker-dealers
tor for these services — an extraordinarily low cost
financing their actual inventory positions, money
compared with any other market in the world.
market funds investing their cash backed by highly
Now let’s take a look at the actual risk and results rated collateral and clients hedging their positions.
versus the hypothetical risk and results. The hypo-
thetical global market shock of the CCAR stress Market makers add confidence, liquidity and
test has us losing $18 billion in a single day and transparency to U.S. capital markets — market
never recovering any of it. Let’s compare that to making helps stabilize markets and can reduce
actual losses under real, actual market stress. volatility.
In addition, more liquidity, not less liquidity, will be
Now consider these historical data points: First,
needed to maintain market stability. Large banks
over the last 10 years, the firm’s market-making
keep an inventory of securities they can deploy in
business has never had a quarterly loss and has
times of stress to help soothe markets; however,
lost money on only 30 trading days. These loss days
with the implementation of new regulations, banks
represent only 1% of total trading days, and the
now hold 70% as much inventory in securities as
average loss on those days was $90 million. Second,
they did before the 2008 financial crisis, while the
when markets completely collapsed during the
total size of the market has almost tripled. Higher
COVID-19 pandemic (from March 2 through March
capital requirements will accelerate this trend
31, 2020, the stock market fell 16%, and bond
even further, impacting banks’ ability to deliver
spreads gapped out dramatically), J.P. Morgan’s
support to clients and markets in times when it is
market-making activities made money every day
needed the most.
prior to the Federal Reserve’s major interventions,
which stabilized the markets. During that entire
month, we lost money on only two days but made
$2.5 billion in Markets revenue for the month. And

Washington’s Basel III endgame proposal • Saving for retirement or college will be harder.
damages market making, hurts Americans The cost of products that families count on to
and drives activity to less transparent, less save for retirement or college will go up as a
regulated markets. result of this proposal. Asset managers, money
If this proposal is enacted as drafted: market funds and pension funds all buy, sell
and safekeep securities and other financial
• Everyday consumer goods could be impacted. instruments for American investors. Under the
Households contending with inflation could also proposed rules, the cost of banking products
feel the effects of higher capital requirements used on behalf of clients each day — including
on market-making activities when they shop. brokerage, advisory, clearing and custody
From beverage companies that need to manage services — will go up and feed through to
aluminum costs to farms that need to protect customers. That will lead to lower returns on
against environmental risks, if the cost of hedg- retirement accounts, college funds and other
ing those risks increases, it could be reflected in long-term savings.
what consumers pay for everything from a can
of soda to meat products. • Government infrastructure projects and cor-
porate development will become more expen-
• Mortgages and small business loans will be sive. Federal, state and local governments, as
more expensive. Consumers seeking a mort- well as corporations and other institutions, rely
gage — including first-time homebuyers and his- on large banks for access to U.S. capital markets
torically underserved, low- to moderate-income to fund development. If accessing capital mar-
borrowers with smaller down payments — will kets becomes more expensive, it will have a rip-
face higher interest rates or will have a tougher ple effect on the hiring of American workers,
time accessing one. This will occur not only investment in research and development, and
because the cost of originating and holding funding to build hospitals, roads and bridges,
these loans is higher but also because the cost including the planned infrastructure projects
of securitizing them will rise for banks, non- from the Inflation Reduction Act (IRA).
banks and government agencies. Not only that,
but the proposal will likely lead to reductions in More market activity will move to unregulated
the size of unfunded credit card lines, which will institutions, out of sight from regulators and with-
put pressure on FICO scores and thereby make it out the same level of consumer protections that
more difficult for some people to access other Americans expect from their banks. Other market
forms of retail credit such as mortgages. Again, participants that don’t have holistic client relation-
this will have the greatest impact on low- to ships are less likely to provide liquidity to help
moderate-income borrowers who rely most stabilize markets.
heavily on credit cards for day-to-day spending In volatile times, banks have been able to interme-
and to build their credit history. It could even be diate to help their clients and to work with the reg-
argued that existing regulations go too far and ulators. With new regulations, they may be less
that there is an opportunity to help underserved able to do so. There have been several times in the
communities by dialing down regulations that past few years where banks had ample liquidity
lead to higher borrowing costs. This should be and capital but were unable to rapidly increase
studied and the pros and cons analyzed. The their intermediation in the markets due to very
same can be said for small business loans, which rigid liquidity and capital requirements. Finally,
will become more expensive and less accessible. the proposed rules increase the chance that the
Federal Reserve will have to step in again — and
this is not something they should want to do on a
regular basis but only in an extreme emergency.

Staying Competitive in the
Shrinking Public Markets
In previous letters, I have described the diminish- today, lead directors generally hold most of the
ing role of public companies in the American finan- authorities previously assigned to the chairman.
cial system. From their peak in 1996 at 7,300, The governance of major corporations is evolving
U.S. public companies now total 4,300 — the total away from guidance by governance principles that
should have grown dramatically, not shrunk. focus on a company’s relationship to long-term
Meanwhile, the number of private U.S. companies economic value toward a bureaucratic compliance
backed by private equity firms — which does not exercise. Good corporate governance is critical, and
include the rising number of companies owned by a little common sense would go a long way.
sovereign wealth funds and family offices — has
grown from 1,900 to 11,200 over the last two THE PRESSURE OF QUARTERLY
decades. This trend is serious and may very well
EARNINGS COMPOUNDED BY BAD
increase with more regulation and litigation
coming. Along with a frank assessment of the ACCOUNTING AND BAD DECISIONS
regulation landscape, we really need to consider: There is something very positive about detailed
Is this the outcome we want? and disciplined quarterly financial and operating
There are good reasons for private markets, and reporting. But company CEOs and boards of direc-
some good outcomes result from them. For exam- tors should resist the undue pressure of quarterly
ple, companies can stay private longer if they wish earnings, and it is clearly somewhat their fault
and raise more and different types of capital with- when they don’t. However, it is naïve to think that
out going to the public markets. However, taking a the pressure doesn’t exist because companies that
wider view, I fear we may be driving companies “disappoint” can face extensive criticism, particu-
from the public markets. The reasons are complex larly those with a new or young CEO. It’s possible
and may include factors such as intensified report- for companies to take short-term actions to
ing requirements (including investors’ growing increase earnings, such as selling more product
needs for environmental, social and governance cheaply at the end of a quarter, cutting certain
information), higher litigation expenses, costly investments that may be terrific but can show
regulations, cookie-cutter board governance, accounting losses in the first year or two, or just
shareholder activism, less compensation flexibility, deploying more aggressive accounting methods at
less capital flexibility, heightened public scrutiny times. Once shortcuts like this begin, people all
and the relentless pressure of quarterly earnings. over the company understand that it is okay to
“stretch” to meet your numbers. This could put you
Along with the universal proxy — which makes it on a treadmill to ruin. Obviously, a company should
easier to put poorly qualified directors on a board not resort to these tactics, but it does happen in
— the pressures to retreat from the public market the public markets — and it’s probably less likely in
are mounting. In addition, corporate governance the private markets.
principles are becoming more and more templated
and formulaic, a negative trend. For example,
THE HIJACKING OF ANNUAL
proxy advisors may automatically judge directors
unfavorably if they have a long tenure on the
SHAREHOLDER MEETINGS
board, without a fair assessment of their actual One of the reasons it is less desirable to be a public
contributions or experience. Another example is company is because of the spiraling frivolousness of
the constant battle by some proxy advisors who try the annual shareholder meeting, which has
to split the chairman and CEO role when there is no devolved into mostly a showcase of grandstanding
evidence this makes a company better off — in fact, and competing special interest groups. We should
36 STAY ING CO M P E TIT I V E I N T H E S H R I N K I N G PU B LI C M ARK E TS

treat shareholders with tremendous respect — and decision-making process. While data and recom-
we do. At JPMorgan Chase, we are constantly talking mendations may form pieces of the information
with our investors — our directors, our lead director mosaic, their votes should ultimately be based on
and our corporate governance experts visit most of an independent application of their own voting
our major investors whether they be direct owners guidelines and policies. To the extent they use rec-
or asset managers who manage the money for oth- ommendations from proxy advisors in their deci-
ers. Meeting with your shareholders and investors is sion-making processes, they should disclose that
critical, but the annual shareholder meeting itself they do so and should be satisfied that the infor-
has become ineffective. We should try to come up mation upon which they are relying is accurate and
with a far more constructive alternative. relevant. However, many companies would argue
that this information is frequently not balanced,
THE UNDUE INFLUENCE OF PROXY not representative of the full view and not accu-
rate. In addition, companies complain that they
ADVISORS
often cannot get the data corrected, and, there-
There are essentially two main proxy advisors in fore, a vote may go uncorrected.
the United States. One is called Institutional
Almost all asset managers receive proxy advisor
Shareholder Services (ISS), and the second is
data and recommendations; while some asset man-
called Glass Lewis. These proxy advisors started
agers vote completely independently of this infor-
out providing reams of data from companies to
mation, the majority do not. Most asset managers
help their institutional investor clients vote on
have formed corporate governance or stewardship
proxy matters (information on executive compen-
committees that are responsible for their voting,
sation, stock returns, detail on directors, policies
and these committee positions are often held not by
and so on). However, they soon also began to pro-
portfolio managers and research analysts (i.e., the
vide advice on how shareholders should vote on
people buying and analyzing the individual securi-
proxy matters. And, in fact, institutional investors
ties) but by stewardship experts. While it is good to
generally execute their voting on an ISS or Glass
have stewardship experts, the reality is that many
Lewis platform, which often includes a clear state-
of these committees default large portions of what
ment of the advisory service’s position.
they do to proxy advisors and, more troubling, make
I should also point out, because it may be relevant, it harder for actual portfolio managers to override
that ISS is owned by Deutsche Boerse, a German this decision making.
company, and Glass Lewis is owned by Peloton
Some have argued that it’s too hard and too expen-
Capital, a Canadian private equity firm. I question
sive to review the large number of proxies and proxy
whether American corporate governance should be
proposals — this is both lazy and wrong. If issues are
determined by for-profit international institutions
important to a company, they should be important
that may have their own strong feelings about what
to the shareholder — for the most part, only a hand-
constitutes good corporate governance.
ful of proposals are important to companies.
While asset managers and institutional
We are making enhancements to J.P. Morgan
investors have a fiduciary responsibility to
Asset Management’s proxy voting processes to
make their own decisions, it is increasingly
amplify the role of portfolio managers and to
clear that proxy advisors have undue
address the perception of asset managers’
influence.
reliance on third-party advisor voting
Asset managers (who manage money on behalf of recommendations.
others) and institutional investors (e.g., pension
Enhancements to the firm’s internal proxy voting
plans and endowments) may rely on a variety of
process will include:
information sources to support their valuation
STAYI N G CO M P E TI TI VE I N THE SHRI N K I N G P U BLI C M A RK E TS 37

• More portfolio manager participation in proxy THE BENEFITS AND RISKS OF PRIVATE
committee decision making. The firm has sig-
CREDIT
nificantly expanded the representation of port-
folio managers on its North American Proxy I have already mentioned some of the benefits of
Committee in an effort to increase the diversity private credit, and I’ll now mention some more.
of viewpoints represented on the committee. As Many people in the private credit arena are very
part of this change, and in recognition that port- smart and creative and want to help the compa-
folio managers, as fiduciaries, may differ in their nies they invest in navigate through market shoals.
views on how to vote on particular proposals They can move quickly, discreetly and flexibly.
depending on a mandate’s investment strategy Most generally understand that bad accounting
and guidelines, we are broadening our capabili- drives bad decisions, and their goal is to make the
ties to support voting results that may vary right decisions for the future of the company.
across our platform.
On the other hand, not all players are that good.
• Diminished role of proxy advisor recommenda- And problems in the private credit market caused
tions. J.P. Morgan Asset Management makes its by the bad players can leak onto the good ones,
own independent proxy voting decisions (based even though private credit money is locked up for
on deep fundamental research) and stands years. If investors feel mistreated, they will cry
behind the depth and rigor of its processes and foul, and the government will respond by putting
historical information advantage. In most cases, a laser focus on the business. It’s a reasonable
the firm will only use proxy advisory firms for assumption that at some point regulations will
research, data and technical mechanics of vote focus on the private markets as they do on the
transmission and not for outsourced recommen- public markets.
dations. By the end of 2024, J.P. Morgan Asset
This scrutiny will include a look at how private
Management generally will have eliminated
credit values its assets, which isn’t as transparent
third-party proxy advisor voting recommenda-
as public market valuations. In addition, private
tions from its internally developed voting sys-
market loans commonly lack liquidity in the sec-
tems. Additionally, the firm will work with third-
ondary market and are not generally supported by
party proxy voting advisors to remove their
in-depth market research.
voting recommendations from research reports
they provide to J.P. Morgan Asset Management New financial products that grow extremely rap-
by the 2025 proxy season. idly often become an area of unexpected risk in
the markets. Frequently, the weaknesses of new
• Other enhancements. We are working to give a
products, in this case private credit loans, may
company and its management even greater
only be seen and exposed in bad markets, which
access to the ultimate decision makers; to raise
private credit loans have not yet faced. When
critical issues to a company as early as possible
credit spreads gap out, when interest rates go up
in a constructive and proactive way; and to be
and when some leveraged companies suffer in the
willing to tell companies how we have voted
recession, we will find out how those loans survive
once our decision is made rather than waiting
stress testing. In addition, they can create a little
until votes are finally counted.
bit of a “credit crunch” for borrowers since it
Taken together, these steps are designed to might be hard for private creditors to roll over
respond to a growing perception (and, I believe, loans under those conditions. Under stress condi-
reality) that the asset management industry gen- tions, private creditors would have to charge exor-
erally places undue reliance on proxy advisors in bitant prices that companies simply cannot afford
how proxies are voted. We believe these actions in order to book the new loan at par. Banks are in a
will strengthen our relationships with our clients slightly different position.
and with companies while helping to build trust
between shareholders, investors and companies.
38 STAY ING CO M P E TIT I V E I N T H E S H R I N K I N G PU B LI C M ARK E TS

A BANK’S STRENGTH: PROVIDING panies through good times and bad, seeking to
retain them as long-term clients across many
FLEXIBLE CAPITAL
areas of the bank. They can and do take “losses”
Banks generally try to be there for their borrowers that help the client maintain the franchise. But an
in difficult times — striving to roll over loans, rene- asset manager must 3:00pm
4/7/24r1 act as a “fiduciary” of other
gotiate terms and raise additional capital. Banks people’s money and cannot lend based on a moral
do this for multiple reasons: They normally feel an obligation or potential future relationship.
24_JD_size of financial sector_08
obligation to help their clients, they have long-
Recently, we have been witnessing a convergence
term relationships and they can commonly earn
between the public and private markets. But it’s
other sources of revenue from client-driven trans-
too soon to say how this ultimately will play out,
actions. Banks can also flex their capital and lend-
particularly if we go through a recessionary cycle.
ing base as needed by their clients. This is because
a bank can and should make decisions to help com-
DRAFT 3/27/24TYPESET; 4/7/24r1 v. 24_JD_size of financial sector_08

Size of the Financial Sector/Industry
($ in trillions)
2007 2010 2023
Global GDP1 $ 61.7 $ 65.0 $ 92.4

Total U.S. debt and equity market $ 54.2 $ 55.9 $ 137.2
Total U.S. broker-dealer inventories $ 6.2 $ 4.1 $ 4.9
Banks in the U.S. GSIB market capitalization $ 0.9 $ 0.8 $ 1.4
financial system U.S. bank loans $ 6.5 $ 6.6 $ 12.4
U.S. bank liquid assets2 $ 1.4 $ 2.8 $ 7.6
Federal Reserve total assets $ 0.9 $ 2.4 $ 7.7
Federal Reserve RRP volume – $ <0.1 $ 1.0
Hedge fund and private equity AUM3 $ 3.1 $ 2.8 $ 9.7

Top 50 sovereign wealth fund AUM4 $ 2.7 $ 4.1 $ 12.0
Loans held by nonbanks5 $ 15.8 $ 14.3 $ 23.2
U.S. money market funds6 $ 3.1 $ 3.0 $ 6.4
Shadow banks U.S. private equity-backed companies (K)7 1996 4.9 6.0 11.3
U.S. publicly listed companies (K)8 7.3 4.6 4.2 4.3
Nonbank share of mortgage originations9 12% 9% 69%
Nonbank share of leveraged lending10 44% 54% 70%
Global private credit AUM10 $ 0.2 $ 0.3 $ 1.6
Sources: FactSet, S&P Global Market Intelligence, Assets and Liabilities of Commercial Banks in the United States H.8 data, Financial Accounts of the United States Z.1 data, World Federation of
Exchanges, Pitchbook, Preqin and World Bank.
AUM = Assets under management

GDP = Gross domestic product
GSIB = Global systemically important banks
RRP = Reverse repurchase agreements
K = Thousands
**FOOTNOTES –MOVED TO BACK PAGE

STAYI N G CO M P E TI TI VE I N THE SHRI N K I N G P U BLI C M A RK E TS 39
Management Lessons: Thinking,
Deciding and Taking Action –
Deliberately and with Heart
I always enjoy sharing what I’ve learned from Get on the road — it builds knowledge and
watching others, reading and experiencing through culture.
my own journey. I have frequently wondered about all the nonstop
road trips, client meetings, briefings, greetings,
BENEFITING FROM THE OODA LOOP bus trips, and visits to call centers, operating
centers and branches, regulators and government
The military, which often operates in extreme
officials, among others: Did they make a differ-
intensity of life and death and in the fog and
ence? The answer is absolutely yes because they
uncertainty of war, uses the term “OODA loop”
enabled a process of constant learning, assess-
(Observe, Orient, Decide, Act — repeat), a strategic
ment and modification of best practices — gaining
process of constant review, analysis, decision
insights from employees to clients to competitors.
making and action. One cannot overemphasize the
Employees will tell you what you are doing well or
importance of observation and a full assessment
poorly if you simply ask them, and they know you
— the failure to do so leads to some of the greatest
want to hear the real answer. Curiosity is a form
mistakes, not only in war but also in business and
of humility — acknowledging that you don’t know
government.
everything. Responding to curiosity allows other
A full assessment is critical. people to speak freely. Facts and details matter
and inform a deeper and deeper analysis that
To properly manage any business situation, you
allows you to continually revise and update your
need to perform a full and complete assessment
plans. This, of course, also means that you are
of it. In business, you have to understand your
constantly admitting prior mistakes.
competitors, their distribution, their economics,
their innovations, and their strengths and weak- You need to shed sacred cows, seek out blind
nesses. You also need to understand customers spots and challenge the status quo.
and their changing preferences, along with your
Very often companies or individuals develop nar-
own costs, your people and their skills. Then
ratives based upon beliefs that are very hard to
there’s knowing how other factors fit in, like tech-
dislodge but are often wrong — and they can lead
nology, risk, motivations … hope you get the point.
to terrible mistakes. A few examples will suffice.
For countries, you need a thorough grasp of their
Stripe, Inc. built a payments business by working
economies, strengths and weaknesses, population
with developers — something we never would
and education, access to raw materials, laws and
have imagined but might have figured out if we
regulations, history and culture. Research, data
had tried to seek out what others were doing in
and analytics should be at a very detailed level and
this area. Branches were being closed, both at
constantly reassessed. Only after you complete
Bank One and Chase, because the assumption
this diligent study can you start to make plans with
was that they would not be needed in the future.
a high degree of success.
We underinvested for years in the wealth man-
agement business because we were always
focused on the value of deposits versus invest-
ments. Question everything.
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Use your brains to figure out the truth — not to examining the connections between those events
justify what you already think. and your projected or desired outcomes. Those
It’s often hard to change your own attitudes and connections inform your risk and R&D planning.
beliefs, especially those you may have held on to Similarly, when companies compare the attributes
for some time. But you must be open to it. When of their products and services with their competi-
you learn something that is different from what tors, they usually only consider where they are
you thought, it may affect many conclusions you versus their competitors. But nothing is static —
have, not just one. Try not to allow yourself to they should consider where their competitors will
become rigid or “weaponized,” where other be in the future. Conditions are always changing,
employees or interest groups jazz you up so much crises are always emerging. When analyzing the
that you become a weapon on their behalf. This playing field, it is better to assume that your com-
makes it much harder to see things clearly for petitors are strong and are already in the process
yourself. When people disagree with you, seek of improving and innovating. This minimizes the
out where they may be partially right. This opens chance of arrogance leading to complacency.
the door for a deeper understanding and avoids
binary thinking. DECISION MAKING AND ACTING
(HAVE A PROCESS)
It’s hard to see certain long-term trends, but
you must try. There is a time for an individual to decide
There is too much emphasis on short-term, and act.
monthly data and too little on long-term trends Sometimes you should take the time to measure
and on what might happen in the future that would twice and cut once. And then sometimes making a
influence long-term outcomes. For example, today quick decision is better than delaying. You should
there is tremendous interest in monthly inflation try to distinguish between the two. For example,
data, although it seems to me that every long-term with decisions that are hard to reverse, it’s usually
trend I see increases inflation relative to the last better to go slow. With other decisions where you
20 years. Huge fiscal spending, the trillions needed can test, learn, probe and change direction, it’s
each year for the green economy, the remilitariza- often better to go fast. It’s been my experience
tion of the world and the restructuring of global that it’s hard for some people to actually decide
trade — all are inflationary. I’m not sure models and act. This could be from analysis paralysis, lack
could pick this up. And you must use judgment if of “perfect” information, fear of failure or the feel-
you want to evaluate impacts like these. ing that full consensus is needed before a decision
can be reached. But whatever it is, it can slow
Also, a block of time as short as one year is an arti-
down and possibly seriously damage a company.
ficial framework for judging the impact of long-
term trends that could easily play out over years. To get people to think like decision makers and
A helpful exercise is to think “future back,” in take a strong point of view, we like to ask, “What
which you imagine different future outcomes, would you do if you were king or queen for a day?”
including the ones you want, and then work back- It helps shift the direction to individual decision
ward to events that are happening today (or that making. We also ask questions like, “What would
might happen or that you cause to happen), closely
M A N AG EM EN T LESS O N S : T H I N K I NG , DECI DI N G A N D TA K I N G ACTI O N — DE LI B E RATE LY A N D W I TH HE A RT 41

you wish for if you knew X was going to happen?” The use of committees can be good when done
(for example, higher interest rates). Decision properly. For example, if our risk committees
making takes a mix of courage, grit and guts. could do a full assessment and crowdsource all
potential risks, that would lead to better decision
One exercise that I find useful (and sometimes
making. I will give one very personal and painful
painful) is to draw up a list of important decisions
example, which is when we had a major trading
that need to be made — the ones I often avoid con-
scandal, called The London Whale. The scandal
fronting. So I take time every Sunday to think
was not caused by the complexity of the trade but
about these tough issues and almost always make
rather the failure to go to the proper Risk com-
progress. Progress doesn’t always mean that you
mittee for a thorough review, which should have
come to the final conclusion — sometimes it’s just a
happened but didn’t. I have no doubt that had the
very rational next step that can put you on a path
trade been raised there, the flaws would have
to the final decision.
been exposed immediately, thereby dramatically
reducing or eliminating the problem. On the other
Try to have a good decision-making process.
hand, the opposite can happen when a commit-
Try to give yourself the time to decide. Make sure tee, with everyone staring at each other, devolves
you speak with the right people and make sure the into herd-like behavior with people looking for
right people are in the room. Information should confirmation and ending up with a compromise
be fully shared. People should be made very com- that is a poor choice.
fortable with open debate. Quite often, the “right”
answer is simply waiting to be found — you don’t Good leadership involves great observation and
have to guess. the ability to act, but there is more …
Crowdsourcing, compromise, consensus and THE SECRET SAUCE OF LEADERSHIP

committees have benefits and risks.
(HAVE A HEART)
There are huge benefits to crowdsourcing intelli-
gence. It is a form of full assessment, a strategy You need to earn trust and respect with your
for getting the best ideas and challenging the sta- employees.
tus quo. We should do this for almost every major
You can be great at assessment, you can be bril-
decision. It is perfectly fine on some occasions to
liant and you may often be willing to act. But all of
compromise and gain consensus, particularly on
that is not good enough for “complete” leadership.
decisions that are not critical and can easily be
To become a true leader, you need to be trusted
reversed. Often people spend too much time
and you must earn your respect, every day. People
debating issues that are simply not that import-
have to know that you do not have ulterior motives
ant; it’s better to decide and move on. Also,
and that you’re trying to do the right thing — not
before you compromise, you should know exactly
trying to burnish your personal reputation. Good
what you want to achieve and the consequences
people want to work for people they respect, and
of any tradeoffs. However, sometimes compro-
they will not respect people who take all the credit
mise and consensus cannot work and only lead to
and share all the blame. People need to know that
a feel-good decision that is probably wrong — this
even when you make mistakes, you’re willing to
could be the road to ruin.
admit them and take corrective action. And there
is more …
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The importance of vision, communication and came to see me over the objection of my manage-
inspiration. ment team.) The reason we were saving money is
The reason I’ve always hesitated to talk about because the healthcare benefits were cut in half
“vision” is because often it is the basic BS of for the guards and their family members (currently
corporate speak — that somehow if you impart worth approximately $15,000 a year), and the sav-
your vision to people, they will take the mountain. ings were split with us. This was a heartless thing
What it really is all about is this: After you’ve done to do — and the second I found out, I reversed the
your full assessment and decision making, you can decision. JPMorgan Chase’s success will not be
then continuously educate, explain, train, simplify, built off the backs of our guards — it will be the
propel and fight. But this only works if people result of fair treatment of all of our employees —
know you are in the trenches with them, if they and we’re thankful that many of those guards are
understand the mission and if they are there side still with our company today.
by side with your effort. You know heart and soul when you see it in effect
We know that bureaucracy can lead to politics, on sports teams or with “the boys in the boat” —
corporate stasis and terrible decisions. So you can it’s a beautiful thing to watch. It’s not as obvious,
communicate your vision about how to fight but it happens in business, too.
bureaucracy by telling stories about the silly things
It’s essential to build trust with your
we do — but with a smile — and then by showing
customers, constituencies and, yes, even
people that you will actually fix the problems.
competitors.
Finally, your vision needs to be clear, coherent and Of course, I’m not bringing this up as a matter of
consistent. Within an organization, people very corporate governance or a corporation’s purpose:
quickly pick up the pattern of management saying A business should, over the long run, try to maxi-
one thing but doing another. Because if words and mize shareholder value. It is completely obvious
actions are inconsistent (for example, and I could that running a decent business —treating everyone
give many, when we say we want employees to be ethically and earning trust and respect in all your
treated with respect, but we allow a jerk to be their communities — is not only fundamental to share-
boss), confidence in leadership will be eroded. holder value but also to a healthy society.
Heart cannot be overstated.

Heart matters. And it makes a difference when
people know and see that you actually care. One
example: Many years ago when I was new to
JPMorgan Chase, I learned that the company’s
security guards had been outsourced — to save
money. Since after outsourcing, when the same
guards continued coming to work every day at the
same salary, I wondered, “How could this be?”
(FYI, this was brought to my attention by the head
of the Service Employees International Union, who
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A Pivotal Moment for America
and the Free Western World:
Strategy and Policy Matter
In past years, I have written extensively about pub- been, the world was generally on a path to becom-
lic policy issues. It is important to engage in these ing stronger and safer. When terrible events
conversations, particularly around domestic happen, we tend to overestimate the effect they
economic policy because policy matters. While will have on the global economy. Recent events,
JPMorgan Chase can execute specific plans to however, may very well be creating risks that could
improve outcomes for customers and communi- eclipse anything since World War II — we should
ties, there is no replacement for effective govern- not take them lightly.
ment policies that add to the general well-being of
February 24, 2022 is another day in history that
the country. A stronger and more prosperous
will live in infamy. On that day, 190,000 Russian
country will make us a stronger company.
soldiers invaded a free and democratic European
As CEO of this company, every year I visit numer- country — importantly, somewhat protected by the
ous countries around the globe. I meet with for- threat of nuclear blackmail. Russia’s invasion of
eign government leaders, presidents and prime Ukraine and the subsequent abhorrent attack on
ministers, business leaders, and civic and aca- Israel and ongoing violence in the Middle East
demic experts, which allows me to learn a signifi- should have punctured many assumptions about
cant amount about how public policy is executed the direction of future safety and security, bringing
around the world. It also reinforces some of the us to this pivotal time in history. America and the
critical values and virtues that are essential to a free Western world can no longer maintain a false
healthy country. sense of security based on the illusion that dicta-
torships and oppressive nations won’t use their
Every time I see the American flag, it reminds me
economic and military powers to advance their
of the values and virtues of this country and its
aims — particularly against what they perceive as
founding principles conceived in liberty and dedi-
weak, incompetent and disorganized Western
cated to the notion that all men and women are
democracies. In a troubled world, we are reminded
created equal. Talk with someone who has recently
that national security is and always will be para-
become a naturalized citizen or watch a ceremony
mount, even if its importance seems to recede in
where groups of people take the oath to America,
tranquil times.
and you will see extraordinary joy and newfound
pride. They now live free, with individual rights The fallout from these events should also lay to
protected by the Constitution and with their life rest the idea that America can stand alone. Of
and the well-being of their family and community course, U.S. leaders must always put America
protected by the U.S. military. As Americans, we first, but global peace and order are vital to
have much to be grateful for and much to defend. American interests. Only America has the full
capability to lead and coalesce the Western world,
If you read the newspaper from virtually any day
though we must do so respectfully and in partner-
of any year since World War II, there is abundant
ship with our allies. Without cohesiveness and
coverage on wars — hot and cold — inflation, reces-
unity with our allies, autocratic forces will divide
sion, polarized politics, terrorist attacks, migration
and conquer the bickering democracies. America
and starvation. As appalling as these events have
needs to lead with its strengths — not only its
44 A P IVOTA L M O M E N T FO R A M ER I C A A N D T H E FR EE W E STE RN WO RLD: STRATEGY A N D P O LI CY M AT TE R

military but also its economic, diplomatic and COALESCING THE WESTERN WORLD — A
moral forces. And now we must do so as America’s UNIQUELY AMERICAN TASK
leadership is being challenged around the world.
There is nothing more important. Only America has the full capabilities of military
might, economic power and the principles that
Policy and strategy matter, and it’s important most people around the world yearn for — based
to be engaged. on “liberty and justice for all” and the proposition
In our increasingly complex world, there is a vital that all people are created equal. America
interrelationship between domestic and foreign remains the bastion of freedom and the arsenal
economic policy, particularly around trade, invest- of democracy.
ment, national security and other issues. And, of
There is no alternative to American leadership.
course, while American voters and leadership set
U.S. foreign policy, being a constructive part of the In the free and democratic Western world, and, in
global conversation has become more important fact, for many other countries, there is no real or
than ever. good alternative to America. The only other poten-
tial superpower is China. Other nations know they
If you doubt how important public policy is for the can rely on the founding principles of America. If
health of a country, you need to look no further we reach out our hand, most nations will happily
than the recent history of Greece, Ireland or take that hand. America is still the most prosper-
Singapore. Each of these countries, starting from ous nation on the planet, which not only can guar-
deeply challenging places, implemented effective antee our military strength but also positions us to
government and policies that have done a great help our allies develop and grow their nations
job of lifting up their people when many thought it (though we should minimize the “our way or the
wasn’t possible. Sweden is another great example highway” type of behavior). This leadership is
of a country with good broad-based policies that needed today to help Ukraine stay free in its battle
have succeeded at precisely what we all may want with Russia.
— a dynamic, innovative, free-market economy
(Sweden actually has fewer government-owned Most of the world wants American leadership.
enterprises than America) and safety nets that America continues to be the envy of much of the
work. Conversely, you need to look no further than world, and as we’ve seen with the challenges at
North Korea or Venezuela to see the complete our borders, there is a reason people want to
destruction and havoc that terrible public policies come here and not to autocratic nations. If you
(often in the name of the people) can cultivate. opened America’s borders to the rest of the world,
Strategy by its nature must be comprehensive. In I have little doubt that hundreds of millions of
the rest of this section, I try to answer the question: people would want to move here. By contrast, not
What must we do to ensure that the world stays many would want to emigrate to autocratic
safe, not only for America but for freedom and nations. Also, I have little doubt that if most inves-
democracy? A comprehensive strategy entails four tors across the globe could only invest in one coun-
important pillars, and we must succeed at each: try, they would choose the United States. Beyond
our country’s borders, people and nations around
1. Maintain American leadership (including the world understand the role that America has
military). played in promoting world peace — known as Pax
2. Achieve long-term economic success with Americana. For the most part, Pax Americana has
our allies. kept the world relatively peaceful since World War
II and helped lead to enormous global economic
3. Strengthen our nation domestically.
prosperity, which has helped lift 1.3 billion people
4. Deepen focus and resolve on addressing out of poverty.
our most pressing challenges.
A P I VOTA L M O M EN T FO R A M ER I CA A N D THE F RE E W E STE RN WO RLD: STRATEGY A N D P O LI CY M AT TE R 45

Modern America does not engage in economic The American public ought to hear more about
coercion or foreign wars to steal land or treasure. why this is so important.
The fact that some of our foreign excursions might International isolationism has run through
have been misguided does not negate this. We American foreign policy throughout our history,
helped rebuild Europe and Japan after the devas- frequently with good reason. The chant, “Don’t get
tation of World War II, and we, with our allies, have involved in foreign wars” was often right. That
helped create global institutions to maintain said, the American public should remember that
peace. We are still trusted. even after the Revolutionary War, we did, in fact,
have British and French armies on our soil. The
First and foremost, the Western world needs
sinking of American merchant and passenger ships
unquestioned military might — peace through
during World War I and the surprise attack on
strength.
Pearl Harbor in World War II brought isolationism
“We know only too well that war comes not when to a close for a time. America is never far from
the forces of freedom are strong, but when they being dragged into terrible conflicts. Global wars
are weak,” said Ronald Reagan in 1980. come to our shores whether we like it or not — we
need to stay engaged.
So far, the Western world has done a good job in
strengthening military alliances in response to the In perilous periods of history when our allies and
war in Ukraine. Ukraine is essentially the front line other democracies were under serious assault,
that needs immediate support. Providing that sup- great American leaders have inspired the Ameri-
port is the best way to counter autocratic forces can people — through words and actions — to
that would seek to weaken the Western world, par- stand up to help and defend them. Staying on the
ticularly America. But the ongoing wars in Ukraine sidelines during battles of autocracy and democ-
and the Middle East could become far worse and racy, between dictatorship and freedom, is simply
spread in unpredictable ways. Most important, the not an option for America today. Ukraine is the
specter of nuclear weapons — probably still the front line of democracy. If the war goes badly
greatest threat to mankind — hovers as the ultimate for Ukraine, you may see the splintering of Pax
decider, which should strike deep fear in all our Americana, which would be a disaster for the
hearts. The best protection starts with an unyield- whole free world. Ukraine’s struggle is our strug-
ing resolve to do whatever we need to do to main- gle, and ensuring their victory is ensuring America
tain the strongest military on the planet — a com- first. It is imperative that our national leaders
mitment that is well within our economic capability. explain to the American people what is at stake
and make a powerful case – with energy, consis-
American leadership requires not only the
tency and clarity – for our strong enduring com-
military but also the full “symphony of power.”
mitment to Ukraine’s survival for as long as it
Former Secretary of Defense Robert Gates, in his takes (and it could take years).
book Exercise of Power, writes extensively in the
One last point: Ukraine needs our help immediately,
first chapter about “the symphony of power.” He
but it’s important to understand that much of the
makes the critical point that America has often
money that America is directing to Ukraine is for
overused and misused military power and has
purchasing weapons and equipment, most of which
massively underused other muscles — diplomacy,
will be built in America. Not only is our aid helping
intelligence, communication (explaining to the
Ukraine, but it is going directly to American manu-
world the benefits of democracy and free enter-
facturers, and it is helping the country rebuild our
prise) and comprehensive economic policy.
military industrial capacity for the next generation.
America has the most extensive group of partners,
friends and allies — both military and economic —
that the world has probably ever seen. We should
put this to better use.

STRENGTHENING OUR POSITION WITH clothes, sneakers, vaccine compounds and con-
sumer goods, this dependency is not as critical or
A COMPREHENSIVE, GLOBAL
complex and will eventually be sorted out.
ECONOMIC SECURITY STRATEGY
The second is the most critical. The United States
Sustaining America’s economic strength is a bed-
cannot rely on any potential adversaries for mate-
rock for our long-term military strength. There are
rials essential to our national security — think rare
many things we need to do to strengthen the U.S.
earths, 5G and semiconductors, penicillin and
economy, and I talk about that later in this section.
materials critical to essential pharmaceuticals,
This discussion is about foreign economic policies
among others. We also cannot be sharing vital
— the economic battlefield.
technologies that can enhance an adversary’s
The whole Western world is rethinking and military capabilities. The United States should
reimagining its military strategies and alliances. properly and narrowly define these issues and
We need to do the same for our economic strate- then act unilaterally, if necessary, to fix them.
gies and alliances, but we should be guided by a
The third is also complex, which is countering
comprehensive global strategy that deals with
unfair competition or “mercantilist” behavior in
critical issues. Done properly, such a strategy
critical industries; think electric vehicles, renew-
would help strengthen, coalesce and possibly be
able energy and AI, among others. Examples of
the glue that holds together Western democratic
this would be where a state, any state, uses gov-
alliances over decades.
ernment powers, capital, subsidies or other means
Foreign economic policy involves trade and invest- to dominate critical industries and deeply damage
ment, export controls, secure and resilient supply the economic position of other nations. Weakening
chains, and the execution of sanctions and any a country economically can render it a virtual
related industrial policies. It must also include “vassal state,” reliant on potential adversaries for
development finance — think of the “Belt and Road” essential goods and services, which also weakens
efforts in China — which are critical to most develop- it militarily. We cannot cede our important
ing nations. This framework should tell us not only resources and capabilities to potential adversaries.
how to deal with our allies but also how to work with
All these issues can be resolved, though they will
nonaligned nations around the world. These strate-
take time and need devoted effort.
gies should not be aimed against any one country
(such as China) but rather be focused on keeping Every nation will have different national security
the world safe for democracy and free enterprise. issues. For example, Europe in general and coun-
tries like India, Japan and Korea need reliable,
Economic national security is paramount — affordable and secure energy; many nations would
both for the United States and for our allies. put food security as their top concern. This means
It is a valid point that the Western world — both that we must work with our allies to accomplish
government and business — essentially underesti- our own goals and to help them accomplish theirs.
mated the growing strength and potential threat of We have extraordinary common interests in our
China. It’s also true that China has been compre- joint security: We must hang together — because if
hensively and strategically focused on these eco- we don’t, we will assuredly hang separately.
nomic issues, all while we slept. But let’s not cry
over spilled milk — let’s just fix it. We already engage in trade — improving it is
good economics and great geopolitics.
We missed the potential threat from three vantage
We must have a better understanding of trade.
points. The first is companies’ overreliance on
As a nation, we refuse to get into genuine trade
China as the sole link in their supply chain, which
discussions, but this ignores the complete and
can create vulnerabilities and reduces resiliency.
obvious truth — we already have trade relation-
But to the extent this involves everyday items, like
ships with all these countries. Approximately 92%

of the world’s consumers live outside the United believe that gas is bad and that oil and gas proj-
States. Increased trade allows our workers and ects should simply be stopped. This is not only
farmers to access those markets. We should nego- wrong but also enormously naïve. One of the best
tiate trade agreements that can achieve more, ways to reduce CO2 for the next few decades is to
economically, for ourselves and our allies, as well use gas to replace coal. When oil and gas prices
as meet all of our national security needs. While it skyrocketed last winter, nations around the world —
is appropriate to use trade to continue to nudge wealthy and very climate-conscious nations like
allies in the right direction around human rights France, Germany and the Netherlands, as well as
and climate, this objective should be subordinated lower-income nations like Indonesia, the Philippines
to our national interests of long-term security. and Vietnam that could not afford the higher cost —
started to turn back to their coal plants. This high-
Negotiating must be done in concert with our allied
lights the importance of safe, secure and affordable
nations so as not to cause a fissure in economic
energy. Second, the export of LNG is a great eco-
relations. This is critical — strong economic bonds
nomic boon for the United States. But most import-
will help ensure strong military alliances. The Infla-
ant is the realpolitik goal: Our allied nations that
tion Reduction Act has much good in it (more on this
need secure and affordable energy resources,
later), but it angered many of our allies. To them,
including critical nations like Japan, Korea and most
the bill was by America and for America, and, sub-
of our European allies, would like to be able to
sequently, they felt a need to match it so their busi-
depend on the United States for energy. This now
nesses would not be disadvantaged. The terms of
puts them in a difficult position — they may have to
the legislation could have been better negotiated
look elsewhere for such supplies, turning to Iran,
with our allies in mind, strengthening our economic
Qatar, the United Arab Emirates or maybe even
ties with the free world.
Russia. We need to minimize anything that can tear
We should also immediately re-enter, if possible, at our economic bonds with our allies.
the prior negotiated Trans-Pacific Partnership
The strength of our domestic production of energy
agreement. Not only is it good for the economy,
gives us a “power advantage” — cheaper and more
but it also could be a brilliant, strategic, economic
reliable energy, which creates economic and geo-
security move — an economic alliance that binds
political advantages.
us with 11 other important countries (including
Australia, Chile, Japan, Malaysia, Mexico, Singa- Industrial policy is now necessary, but it
pore and Vietnam). Geopolitically and strategically, should be carefully constructed and limited.
this might be one of the most important moves to
In some cases, industrial policy (using government
counter China. While this is a challenging step, our
resources to subsidize investments to help make
political leaders need to explain and lead — and
businesses more competitive) may be the only
not be afraid of dealing with the tough issues. We
solution for quickly building up the industries we
also need to acknowledge that there have been
need (rare earths and semiconductors, among
real negative job impacts as a result of trade,
others) to guarantee resilient national security.
which are usually concentrated around certain
The IRA and CHIPS Act are good examples of this
areas and businesses. So any new trade policy
and government has to get it right.
should be combined with a greatly enhanced Trade
Adjustment Assistance program, which provides Such policy can also be used to help combat unfair
retraining, income assistance and relocation for competitive policies of nations that are using state
those workers directly impacted by trade. capitalism and state control to dominate critical
industries. However, when crafting industrial policy,
Trade is realpolitik, and the recent cancellation of
the function of government needs to be narrowly
future liquified natural gas (LNG) projects is a good
defined and kept simple; i.e., governmental jurisdic-
example of this fact. The projects were delayed
tion should be limited to very specific products and
mainly for political reasons — to pacify those who

probably to what we know works, such as tax cred- barrels of oil a day. It is clear that China’s new lead-
its and, to a lesser extent, loan guarantees. And ership has set a different course, with a much more
industrial policy should include twin provisions: intense focus on national security, military capabil-
1) strict limitations on political interference, like ity and internal development. That is their right, and
social policies, and 2) specific permitting require- we simply need to adjust to it.
ments, which, if not drastically improved, will badly
America still has an enormously strong hand —
inhibit our ability to make investments and allow
plenty of food, water and energy; peaceful neigh-
infrastructure to be built. Adding social policy, poli-
bors; and what remains the most prosperous and
tics and matters other than simple tax credits dra-
dynamic economy the world has ever seen, with
matically reduces the economic efficiency of indus-
a per person GDP of over $80,000 a year. Most
trial policy and creates conditions for corporate
important, our nation is blessed with the benefit of
America to feed at the trough of government
true freedom and liberty. See the sidebar on the
largess. We should quickly address how we can
amazing power of freedom later in this section.
improve on already executed legislation. We do not
want to look back and have great regrets about how While we may always have a complex relationship
so much of this policy work failed. with China (made all the more complicated and
serious by ongoing wars), the country’s vast size
There are those who argue that the U.S. govern-
and importance to so many other nations requires
ment needs much more far-reaching industrial
us to stay engaged — thoughtfully and without
policy to be able to micromanage and accomplish
fear. At the same time, we need to build and exe-
its many ambitious objectives. To those I say, read
cute our own long-term, comprehensive economic
the next section about how ineffective so many
security strategy to keep our position safe and
government policies have been.
secure. I believe that respectful, strong and consis-
We should be tough, but we should engage tent engagement would be best for both our coun-
with China. tries and the rest of the world.
Over the last 20 years, China has been executing We need to strengthen and rebuild the
a more comprehensive economic strategy than we international order — we may need a new
have. The country’s leaders have successfully Bretton Woods.
grown their nation and, depending on how you
The international rules-based order established by
measure it, have the first or second largest econ-
the Western world after World War II is clearly
omy in the world. That said, many question the
under attack by outside forces, somewhat weak-
current economic focus of China’s leadership as
ened by its own failures and inability to keep up
they don’t have everything figured out. While
with the increasingly complex world. This interna-
China has become the largest trading partner to
tional order relies on a web of military alliances,
many countries around the world, its own GDP per
trade agreements (e.g., World Trade Organization),
person is $13,000. And the country continues to be
development finance (e.g., International Monetary
beset by many economic and domestic issues.
Fund and the World Bank) and related global tax
China has its own national security concerns. The and investment policies and diplomacy organiza-
country is located in a very politically complex part tions (e.g., United Nations), which have evolved
of the world, and many of China’s actions have into a confusing and overlapping regime of poli-
caused its neighbors (e.g., Japan, Korea, Philippines, cies. You can now add to it the new issues of cyber
among others) to start to re-arm and, in fact, draw warfare, digital trade and privacy, and global
closer to the United States. It also surprises many taxes, among others.
Americans to hear that while our country is 100%
energy sufficient, China needs to import 10 million

It might be a good idea to convene a group of like- In the sidebar, I also explain how two policies (a
minded leaders to build and improve upon what large expansion of the Earned Income Tax Credit
already exists. The time may be right for a reimag- and focus on work skills and job outcomes at high
ined Bretton Woods — and by this, I mean revitaliz- schools, community colleges and colleges) would
ing our global architecture. Since too many parts not only dramatically increase both the income
of the world have been neglected, any new system and employment opportunities for many of those
has to take into account and properly address the left behind but would also have the virtue of actu-
needs of all nations, including areas of concen- ally growing the workforce. The combined effect of
trated poverty. all of this would be quite a boon to our GDP.
While we hope the wars in Ukraine and in the I believe that many affected Americans are not
Middle East will end eventually (and, we hope, suc- angry at hardworking, law-abiding immigrants
cessfully from the standpoint of our allies), these and, in fact, acknowledge the critical role immi-
other critical economic battles could possibly con- grants continue to play in building this wonderful
tinue throughout our lifetime. If the Western world country. Rather, they are angry that America has
is slowly split apart over the next few decades, it not implemented proper border control and immi-
will likely be the result of our failure to effectively gration policies. It is astounding that many in
address crucial global economic challenges. Congress know what to do and want to do it but
are simply unable to pass legislation because of
PROVIDING STRONG LEADERSHIP partisan politics. Congress did come close on a
few occasions — and I hope they keep trying.
GLOBALLY AND EFFECTIVE
POLICYMAKING DOMESTICALLY Deliberate policies meant to drive healthy
growth are needed.
When you travel around the United States and talk
with people of all types and persuasions, there is a For over two decades, since 2000, America has
rather common refrain; namely, why are we help- grown at an anemic rate of 2%. We should have
ing foreign nations with the safety of their borders strived for and achieved 3% growth. Had we done
and economies when we are not doing a particu- so, GDP per person today would be $16,000
larly good job of protecting our own? While there is higher, which would, in turn, have paid for better
no moral equivalency in these arguments, they are healthcare, childcare, education and other
understandable. It is clear that many Americans services. Importantly, the best way to handle
feel we need to do a better job here at home our excess deficit and debt issues is to maximize
before we can focus over there. We can under- economic growth.
stand why some people living in this country, who
Growth policies include (the list could be very
have been neglected for decades, ask how their
long so I’ll just mention a few):
government can find the money for Ukraine and
other parts of the world but not for them. It is a • Consistent tax policies, conducive to both
reasonable question. employment and capital investment. Capital
investment is the primary driver of innovation,
From my point of view, our highly charged, emo-
productivity and, therefore, growth in America.
tional and political domestic issues are centered
Tax policies change too frequently, which causes
around 1) immigration and lack of border security
uncertainty and complicates long-term capital
and 2) the fraying of the American dream, particu-
investment decision making (I won’t bore you
larly for low-income and rural Americans who feel
with the details here). A bipartisan committee of
left behind amid the growing wealth and prosper-
Congress is probably required to fix this — and
ity of others around them. Please read the sidebar
the sooner the better.
on page 57, which I believe explains the legitimate
frustration of some of our citizens. And I agree
with them.

• Well-conceived regulations (and related • Proper federal government budgeting and
laws). This requires an ongoing concerted fiscal management. The staggering inability
effort to streamline regulations to cost- of the government to draft and pass a proper
effectively drive better outcomes for the budget causes deep and unnecessary damage
United States. The last thing we need is a to our growth. Some people estimate that the
constant pile-on of politically driven, frag- waste alone (due to improper payments, over-
mented policies. Please read the sidebar, an lapping programs, and fragmented and duplica-
editorial in The Wall Street Journal by George tive contracts, among other things) could cost
McGovern, one of the most liberal presidential the nation hundreds of billions of dollars annu-
nominees in our lifetime, in which he clearly ally. This uncertainty filters through virtually
lays out the complexity, risks and costs that every part of the American economy and should
businesses, large and small, face every day. not be accepted.
While he acknowledges the worthiness of
the goals of many regulations, he points We can all forgo a little self-interest to do what
out their negatives. He also calls out the is right for our country.
“blame-shifting and scapegoating and the Those of us who have benefited the most from this
endless exposure to frivolous claims and high country bear even greater responsibility to do this.
legal fees.” Not only is this state of affairs It’s perfectly understandable that institutions,
demoralizing, but it also reduces employment, including businesses, unions and industries, lobby
capital investment and the formation of new in Washington, D.C., to protect themselves — in
businesses, as well as cause unnecessary good ways and bad — but we should more regu-
bankruptcies. Estimates of the regulatory larly put national interests ahead of self-interests.
costs for America are approximately $19,000 It’s good to want to ensure well-paying jobs and
per worker, dwarfing the regulatory burdens healthy industries. But it is not good when it
in other countries. We all want sensible regula- reduces competition, stops the deployment of
tions that make us a better and safer nation — enhanced technology, harms efficiency, creates
but this number is astounding. We should be fake jobs or builds bridges to nowhere or damages
able to accomplish our goals while sharply the general health of the economy. Doing the right
reducing needless and wasteful expenses. thing, the right way — which is achievable — would
And remember, it’s discouraging not only to be better for everyone. As former President John
companies but to all citizens who have to deal F. Kennedy said, “Ask not what your country can do
with it on a daily basis. for you — ask what you can do for your country.”
• Timely permits on projects large and small. Celebrate American exceptionalism.

There is virtually no industry — from agricul-
We can safely say that America is an exceptional
ture and construction to transportation, tech-
nation built and grounded on principles — princi-
nology, and oil and gas — or business, large or
ples of freedom of speech, freedom of religion,
small, that isn’t disadvantaged by the tedious free enterprise (capitalism), and the freedom and
process and the length of time it takes to get empowerment brought to us by our democracy
approvals for permits to get things done. This through the power to elect our leaders and of our
includes federal, state and local requirements. Constitution, which makes these individual free-
These bottlenecks also make investment far doms sacrosanct. Much of the world yearns to be
more costly and slow. Timely permits would here because of those principles — the right to life,
improve infrastructure and save lives, not liberty and the pursuit of happiness. We should
endanger them. extol those virtues while recognizing that America
has never been a perfect nation, like all other
nations. We can acknowledge our flaws and strive
to constantly correct them, without denigrating
our nation.

Let’s celebrate the shared sense of sacrifice other, which diminishes them and the voter. It has
that gives us all strength. also become too acceptable for some politicians to
say one thing in private and deliver a completely
There were very few positives from the pandemic,
different message in public. It would also be nice
but I’m mentioning one, which, unfortunately,
to see some cabinet members from the opposing
didn’t last, but reflected the best of us. In New
party. We should also stop degrading and demon-
York City, at 7 p.m. every evening, people through-
izing American business and American institutions,
out the city would open their windows, shouting
which are the best in the world, because it erodes
and screaming and banging pots and pans to show
confidence in our very country.
gratitude to the essential workers — sanitation
workers, police, firefighters, emergency respond-
Social media could do more.
ers, nurses and doctors. Of course, these workers
were always essential, but I was hoping that spirit There is no question that social media has some
and civility would become deeply embedded and real negative effects, from the manipulation of
have longer lasting effects in our society. elections to the increasingly documented negative
effects on the mental health of children. These are
I can understand when an individual for conscien- issues impacting our individual and collective
tious reasons chooses not to do work that helps spheres, and it’s time for social media companies
our military. But I cannot understand when an to take more action to remedy these challenges —
entire company takes that position. How can we and swiftly. Rapid advances in technology will not
have a sense of shared sacrifice, when America is only make these existing issues harder to address,
home to 18 million veterans who were willing to but they will likely create new ones. The current
risk their lives for America’s safety, and yet some state of the online information landscape has
companies are not even willing to use their finger- wide-ranging implications on trust in institutions,
tips to help? information integrity and more — and it bears on
institutions like ours, where platform policy has
For example, back in 1969 the cancellation of the
increasingly widespread implications for concerns
Reserve Officers’ Training Corps programs by the
about fraud, security and other issue spaces.
country’s most prestigious universities and col-
leges likely fueled the great divide — between A range of tools and approaches is required to
elites and others in our country — that persists address this complex and important situation —
today. Our strength as a nation is best served and there are several measures that platform com-
when the best students and the best soldiers are panies can immediately enact, voluntarily, while
brought together and we would all benefit from strengthening and improving their business mod-
more civility and better teaching around basic els. One common sense and modest step would be
virtues like hard work, shared sacrifice, justice, for social media companies to further empower
rationality and more respect for the enduring platform users’ control over what they see and
values of American freedom and free enterprise. how it is presented, leveraging existing tools and
features — like the alternative feed algorithm set-
Resist being “weaponized.” tings some offer today. I believe many users (not
We can start by trying to understand other peo- just parents) would appreciate a greater ability to
ple’s and other voters’ points of views, even more carefully curate their feeds; for example,
around deeply emotional topics. We can stop prioritizing educational content for their children.
insulting whole classes of voters. We can stop
Platforms could also consider enhanced authenti-
name calling. We can stop blame-shifting and
cation measures; i.e., having users identify them-
scapegoating. We can stop being petty. Politicians
selves to the platform or to a trusted third party.
can cease insulting, baiting and belittling each
This would have the virtue of increasing individual
accountability and reducing imposters, bots and

possibly foreign political actors on platforms. It with business is also evident from the regular lack
would have immediate benefits for users who pre- of transparency or curiosity from regulators as
fer content from authenticated sources that take they develop economic policies with potentially
responsibility for their postings. There are clear seismic consequences for the economy.
competing values that need to be balanced in such
When I travel around the country, I experience a
an approach, including those related to our cher-
very different perspective on the street and at the
ished right to free speech, individual privacy and
local level — I see that many governors, mayors
inclusion (for example, roughly 850 million people
and city council members understand they are not
globally don’t have a way to easily authenticate
facing big challenges alone. They stand shoulder to
themselves today). There are also legitimate ques-
shoulder with our company, even when some of
tions as to whether authentication would be used
their constituents disagree or are skeptical about
as a tool to chill or block speech or quash bona
big banks. These government officials know they
fide political dissenters, and real work needs to be
need partners who have the same stake in helping
done to identify policy and technical solutions that
successful communities thrive and who care about
balance such risks and benefits.
building a prosperous future as much as they do.
I offer these approaches as a starting place, under- For example, in fewer than 10 years, Detroit saw
standing that it’s crucial to continue honest con- one of the greatest turnarounds because of a
versation across sectors about the immediate, vibrant collaboration between government and
incremental improvements we can make to our business. And businesses know they cannot suc-
online public square, considering the high stakes ceed if individuals, families, towns and cities are
involved in how information is created and shared. not flourishing. We obviously don’t agree on every-
thing, but there is a shared belief that we must
Effective measures will require time, money, learn-
work together. We can and should be full partners
ing and improvement, all in service of significantly
in developing solutions to our big problems.
enhancing the well-being, quality, and civility of
our experiences online and in the world around us. The federal government, regardless of which
party is in charge, needs to earn back trust
Healthy collaboration with business is needed.
through competence and effective
Companies big and small create jobs, pay for policymaking.
employee healthcare and benefits, and build
The world is becoming more complex, more tech-
bridges, roads and hospitals. The people who work
nologically competent and faster. Unfortunately
for and run these companies care deeply about
the government simply is not built to innovate,
their country — they are patriots, and they want to
compete and move quickly, as in the competitive
see people and communities succeed and prosper.
business world. This may be the reason why gov-
Unfortunately, the message America hears is that ernment is becoming less effective. We need to
the federal government does not value business — take action on this because the loss of trust in
that business is the problem and not part of the government is damaging to society. We should be
solution. There are fewer individuals in govern- brutally honest about the staggering number of
ment who have any significant experience in start- policies, systems and operations that are under-
ing or running a company, which is apparent every performing: Too many ineffective public schools do
day in the political rhetoric that demonizes busi- not give students the skills they need to land a
nesses and free enterprise and that damages con- well-paying job; we have over 25 million uninsured
fidence in American’s institutions. The relationship Americans, soaring healthcare costs and too many
between business and government, in fact, might bad outcomes; we are unable to plan, permit and
improve if there were more people from the busi- build infrastructure efficiently; our litigation sys-
ness sector working in government. Inexperience

tem is capricious and wasteful; progress on immi- OUT OF THE LABYRINTH, WITH FOCUS
gration policies and reform is frustrating; lack of
AND RESOLVE
efficient mortgage markets and an affordable
housing policy keep housing out of reach for many Even America, the most prosperous nation on the
Americans; problems plague the Department of planet with its vast resources, needs to focus its
Veterans Affairs, the Federal Aviation Administra- resources on the complex and difficult tasks ahead.
tion and the Internal Revenue Service; public uni-
I hope to never read a book about How the West
versities don’t take responsibility for their costs
Was Lost, summarized as follows: The failure to
and are often funded by excessive student lending;
save Ukraine and find peace in the Middle East led
underinvestment in the electric grid results in high
to more bickering among the allies and weakened
costs and unreliable service; highly inefficient U.S.
military alliances. This accelerated a division
merchant shipping and ports; and we have
within the Western world, splitting countries into
unfunded pension plans and no action on deficit
different economic spheres and with each nation
spending, Social Security and Medicare. I’ll stop
trying to protect its economy, trade and energy
here. This should be unacceptable to all of us.
sources. America’s economy weakened, eventually
We need to find a way to bring more varied leading to the loss of its reserve currency status.
expertise and accountability to government. Besotted by populism and partisanship and
crippled by bureaucracy and lack of willpower,
We should be more ambitious in striving for excel-
America failed to focus on what it needed to do
lence in government. I acknowledge that some of
to lead and save the Western world. The enemy
the best and the brightest are in government and
was within — we just didn’t see it in time.
the military today. Yet we should return to a govern-
ment that seeks out more of the best and the Paraphrasing what Winston Churchill was thought
brightest people from every background, including to have said: America, after it had exhausted all
the private sector, to benefit from their knowledge other possibilities, would do the right thing.
and experience. Government also needs to leverage
What I want and hope to see is a book about
the expertise of business to address problems that
How the West Was Won. As the wars in Ukraine
it cannot solve on its own. And to be fair, business
and the Middle East dragged on and as the fears of
could use its influence to do less to further its own
the Western world mounted, America rose to the
interest and more to enhance the nation as a whole.
challenge as it had in other turbulent times in
We need good government. And there are some history. America coalesced with its allies to form
things only governments can do, such as oversee the alliances necessary to keep the world safe for
the military and justice systems. And while most freedom and democracy.
innovation happens through the private sector,
I remain with a deep and abiding faith in the
there are certain types of foundational innovations
strength of the enduring values of America.
that can only be advanced by the government,
such as basic research that simply cannot be
funded by business. The Democrats want the
government to do even more and the Republicans
even less — I think we should spend more time
trying to do even better. But no one, not even my
most liberal Democratic friends, thinks that send-
ing the government another trillion a year would
be a wise use of money.

WE SHOULD HAVE MORE FAITH IN THE AMAZING POWER
OF OUR FREEDOMS
The heart and soul of the dynamism of America is human you don’t like them (which you do not see in autocracies). But
freedom — freedom of speech, freedom of religion, free we all know that democracy can be sloppy: Maintaining an
enterprise (capitalism), and the freedom and empowerment effective democracy is hard work. Democracy fosters open
brought to us by our democracy through the right to elect our debate and compromise, which lead to better decisions over
leaders. Free people are at liberty to move around as they see time (whether in government or in business). Intelligence is
fit, work as they see fit, dream as they see fit, and invest in effectively “crowdsourced” with constant feedback. Good public
themselves and in the pursuit of happiness as they see fit. This policy comes from good debate and analytics, guided by reason
freedom that people enjoy, accompanied by the freedom of coupled with a firm understanding of what you would like the
capital, is what drives the dynamism — economic and social — of outcomes to be and complemented with an honest assessment
this great country. of what is really happening.
Our civil liberties depend upon the rule of law, property rights, Even democracies can become stagnant, bureaucratic and self-
including intellectual property, and restrictions on government perpetuating. Good government does many admirable things,
encroachment upon these freedoms. Our Constitution and Bill but admitting to mistakes is often not one of them. It takes
of Rights secure our individual freedoms and reserve all rights civically engaged citizens and a strong free press to bring
to the individual other than those important but limited sunlight to issues and keep a nation strong.
authorities given to the government.
Autocratic societies by their nature subjugate the individual to
The issue of individual rights is not all or none or freedom ver- the state. By definition they are not meritocracies — they are
sus no freedom. There are, of course, terrible examples where more about “who you know,” and they exist to perpetuate the
individual rights were trampled upon, and the results were dev- existing ruling class. Their decisions are based on a completely
astating — both for the individual and for the economy — in East different calculation, and their decision-making process does
Germany, Iran, North Korea, Russia, Venezuela, to name a few. not encourage and, therefore, benefit from open
And there are many countries that protect individual rights and debate. Democracy means that it is immoral to subjugate
are on a spectrum closer to American values. Think of Europe, individual freedoms to state actors other than to protect the
for example. But even in some countries that have some of existence of the nation itself.
these rights, a lack of dynamism — often due to bureaucracy,
There are values that many of us hold dear, such as religion,
weak institutions and government, and corruption — is palpable
family and country. But none may be more important than the
and has clearly led to less innovation, lower growth and, in
freedoms that allow us to choose to live our life as we see fit.
general, a lower standard of living.
We should do more to applaud the virtue and amazing power of
Freedom must necessarily be joined with the principle of our freedoms.
striving toward equal opportunity. Equal opportunity is what
allows individuals to rise to the best of their ability — it also
means unequal outcomes. Equal opportunity is the foundation
for fairness and meritocracy. The fight for equality, which is a
good moral goal, should not damage the rights of the individual
and their liberties.
Democracy and freedom are cojoined — together, they make

freedom more durable. Democracy also has a self-correcting
element — every four years you get to throw out leadership if

HOW WE CAN HELP LIFT UP OUR LOW-INCOME CITIZENS
AND MEND AMERICA’S TORN SOCIAL FABRIC
To fix problems, we must first acknowledge them. Despite incarcerated. Those who do run afoul of our justice system
decades of government programs and all the moralizing that generally do not get the second chance that many of them
surrounds them, we have not done a particularly good job deserve. Their exclusion from the workforce is not only unfair
lifting up our low-income fellow citizens. I may be wrong, but I to them but also results in an estimated $87 billion average
do believe this is tearing at the social fabric of America and is annual cost to the economy.
among the root causes of the fraying of the American dream.
Too many policies that are wrong — affecting housing and
The gap between low-wage and well-paid workers has been mortgage markets, healthcare, immigration, regulation,
growing dramatically. From 1979 to 2019, the wage growth of education and student lending, to name a few — are
the top 10% was nearly 10 times that of the bottom 10% — jeopardizing the opportunity for American citizens to succeed.
which, basically, had not increased at all. The growth of low- The people who suffer the most, throughout all of this, are not
income workers’ annualized real wages after the pandemic high-income individuals. I strongly believe that these outcomes
was, for the first time in decades, higher than the top 60%, but are destroying the concept of “fair” in America and are driving
that’s not enough. The net worth for the bottom 25% of populism and diminishing, if not eliminating, trust — not only in
households is $20,800, and the net worth for the bottom 10% government but in all our institutions. Simply put, the social
is essentially $0. This makes it increasingly difficult for low- needs of far too many of our citizens are not being met. We
wage workers to support their families. Of the 160 million should never accept these outcomes — we must fix them.
Americans working today, approximately 40 million are paid
There are two policy changes that I believe can have a dramatic
less than $15 per hour.
effect on jobs, growth and equality — and they go a long way
Low-income individuals bear far greater burdens than the rest toward repairing the frayed American dream. Let’s start by
of us. Nearly 40% of Americans don’t have $400 in savings to treating all jobs with respect. Even starter jobs, which are the
deal with unexpected expenses, such as medical bills or car first rung on the ladder of opportunity, bring dignity and create
repairs, which leads to financial distress. More than 25 million better social outcomes in terms of health, higher household
Americans don’t have medical insurance at all; of these, one in formation and lower crime. Of these two policy changes, one
five are in a family with income below the federal poverty level. would better utilize existing resources, and the other would
People who live in low-income neighborhoods also tend to have cost some money. But both would significantly change
worse health outcomes, including higher rates of mental health outcomes for low-income Americans.
issues, depression and suicide, and a lower life expectancy — as
The free one is so blindingly obvious that it’s almost
many as 20 years. Finally, low-income Americans generally
embarrassing to propose. Our schools (high schools,
experience higher unemployment and more crime.
community colleges and perhaps even four-year colleges)
No one can claim that the promise of equal opportunity is being should take responsibility for outcomes — they should be
offered to all Americans through our education systems. judged on the quality and income level of the jobs that their
Students in the lowest socioeconomic bracket are 50% less graduates and even non-graduates attain. This means providing
likely to attend college than those in the highest socioeconomic graduating students and other individuals with work skills (in
groups. Many inner city schools graduate under 50% of their fields such as advanced manufacturing, cyber, data science and
students — and even those who graduate may not be well- technology, healthcare and so on) that will lead to better paying
prepared for the workforce. In addition, boys growing up in the jobs. These schools should work with local businesses to
bottom 10% of family income are 20 times more likely to be replicate effective programs that are in place — because that is
where the actual jobs are now. This would be good for growth
and, as there are so many examples of successful programs, we

already know what to do. With nearly 9 million job openings An increase in the EITC to a maximum of $10,000 would cost
and just under 6 million unemployed workers in the United tens of billions a year, but I have little doubt that these policy
States, job skills training has never been needed more. We changes would do more than anything else to lift up low-
already spend a tremendous amount of money on education — income families and their communities. Well-paying jobs have
just not the right way. been shown to reduce crime, increase household formation,
improve health and reduce addiction. Both of these policies
The second step is related to the first: Get more income to low-
would have the virtue of increasing the number of people in the
paid workers. While this one would cost money, it is to me a
workforce. I also have little doubt that this would add to GDP.
complete no-brainer since it is an expansion of an existing
program, the Earned Income Tax Credit (EITC), which many We should attack all our other problems as well, but these two
Democrats and Republicans already agree upon. Today, the policy changes alone would dramatically improve our low-
EITC supplements low- to moderate-income working individuals income neighborhoods, broadly strengthen the economy and
and couples, particularly with children and people living in rural give more opportunity to deserving citizens. It would restore
areas. For example, a single mother with two children earning the American Dream for many.
$9 an hour (approximately $20,000 a year) could receive a tax
credit of more than $6,000 at year-end. Workers without
children receive a very small tax credit (96% of all EITC dollars
were received by families with children). This should be
dramatically expanded, including eliminating the child
requirement from the calculation altogether. We should convert
the EITC to make it more like a negative income payroll tax,
paid monthly. Any tax credit income should not be offset by any
other benefits these individuals already receive (we have to
eliminate benefit “cliffs” that disincentivize work).

In Closing
It’s been 20 years since the Bank One-JPMorgan Chase merger — and it’s been
an extraordinary journey. I can’t even begin to express my heartfelt appreciation
and respect for the tremendous character and capabilities of the
management team who got us through the good times and the bad times
to where we stand today. And I recognize that we all stand on the shoulders of many
others who came before us in building this exceptional company of ours.
I would also like to express my deep gratitude to the 300,000+ employees,

and their families, of JPMorgan Chase. Through these annual letters,
I hope shareholders and all readers have gained a deeper understanding
of what it takes to be an “endgame winner” in a rapidly changing world.
More important, I hope you are as proud of what we have achieved — as a business,
as a bank and as a community investor — as I am.
Thank you for your partnership.
Finally, we sincerely hope to see the world on the path to peace and prosperity.
Jamie Dimon
Chairman and Chief Executive Officer
April 8, 2024
59
Footnotes
Client Franchises Built Over the Long Term (page 11)
Note: figures may not sum due to rounding
1 Certain wealth management clients were realigned from Asset & Wealth Management (AWM) to Consumer & Community Banking (CCB) in 4Q20. 2005 and 2013
amounts were not revised in connection with this realignment.
2 Federal Deposit Insurance Corporation (FDIC) Summary of Deposits survey per S&P Global Market Intelligence applies a $1 billion deposit cap to Chase and
industry branches for market share. While many of our branches have more than $1 billion in retail deposits, applying a cap consistently to ourselves and the
industry is critical to the integrity of this measurement. Includes all commercial banks, savings banks and savings institutions as defined by the FDIC.
3 Barlow Research Associates, Primary Bank Market Share Database. Rolling 8-quarter average of small businesses with revenues of more than $100,000 and
less than $25 million. 2023 results include First Republic. Barlow’s 2005 Primary Bank Market Share is based on companies with revenues of more than
$100,000 and less than $10 million.
4 Total payment volumes reflect Consumer and Small Business customers’ digital (ACH, BillPay, PayChase, Zelle, RTP, external transfers, digital wires), non-digital
(non-digital wires, ATM, teller, checks) and credit and debit card payment outflows.
5 Digital non-card payment transactions includes outflows for ACH, BillPay, PayChase, Zelle, RTP, external transfers, and digital wires, excluding Credit and Debit
card sales. 2005 is based on internal JPMorgan Chase estimates.
6 Represents general purpose credit card (GPCC) spend, which excludes private label and Commercial Card. Based on company filings and JPMorgan Chase
estimates.
7 Represents GPCC loans outstanding, which excludes private label, American Express Company (AXP) Charge Card, Citi Retail Cards, and Commercial Card. Based
on loans outstanding disclosures by peers and internal JPMorgan Chase estimates.
8 Represents users of all web and/or mobile platforms who have logged in within the past 90 days.
9 Represents users of all mobile platforms who have logged in within the past 90 days.
10 Based on 2023 sales volume and loans outstanding disclosures by peers (AXP, Bank of America Corporation, Capital One Financial Corporation, Citigroup Inc.
and Discover Financial Services) and JPMorgan Chase estimates. Sales volume excludes private label and Commercial Card. AXP reflects the U.S. Consumer
segment and JPMorgan Chase estimates for AXP’s U.S. small business sales. Loans outstanding exclude private label, AXP Charge Card, Citi Retail Cards and
Commercial Card. Card loans outstanding market share has been revised to reflect a restatement to the 2022 reported total industry outstandings disclosed by
Nilson, which impacts annual share growth in 2023.
11 Inside Mortgage Finance, Top Owned Mortgage Servicers as of 4Q23.
12 Experian Velocity data as of FY23. Reflects financing market share for new and used loan and lease units at franchised and independent dealers.
13 Coalition Greenwich Competitor Analytics (preliminary for FY23). Market share is based on JPMorgan Chase’s internal business structure and revenue. Ranks
are based on Coalition Index Banks for Markets. 2006 rank is based on JPMorgan Chase analysis.
14 Dealogic as of January 2, 2024, excludes the impact of UBS/CS merger prior to the year of the acquisition (2023).
15 Client deposits and other third-party liabilities pertain to the Payments and Securities Services businesses.
16 Firmwide Payments revenue metrics exclude the net impact of equity investments; 2005 data represents Treasury Services firmwide revenue only. All other
periods include Merchant Services revenue.
17 Coalition Greenwich Competitor Analytics (preliminary for FY23) reflects global firmwide Treasury Services business (CIB and CB). Market share is based on
JPMorgan Chase’s internal business structure, footprint and revenue. Ranks are based on Coalition Index Banks for Treasury Services.
18 Institutional Investor.
19 Based on third-party data.
20 The Market Share number represents US dollar payment instructions for direct payments and credit transfers processed over Society for Worldwide Interbank
Financial Telecommunications (“SWIFT”) in the countries where J.P. Morgan has sales coverage.
21 Nilson, Full Year 2023.
22 Coalition Greenwich FY23 Competitor Analytics (preliminary). Rank is based JPMorgan Chase’s internal business structure and revenue and Coalition Index
Banks for Securities Services.
23 Data in 2005 column is as of 12/31/2006.
24 New relationships (gross) exclude impact of First Republic acquisition.
25 Includes gross revenues earned by the Firm that are subject to a revenue sharing arrangement between CB and the CIB for Investment Banking and Markets’
products sold to CB clients. This includes revenue related to fixed income and equity markets products.
26 S&P Global Market Intelligence as of December 31, 2023.
27 London Stock Exchange Group, FY23.
28 Aligns with the affordable housing component of the Firm’s $30 billion racial equity commitment.
29 Percentage of active mutual fund and active ETF assets under management in funds ranked in the 1st or 2nd quartile (one, three and five years): All quartile
rankings, the assigned peer categories and the asset values used to derive these rankings are sourced from the fund rating providers. Quartile rankings are
based on the net-of-fee absolute return of each fund. Where applicable, the fund rating providers redenominate asset values into U.S. dollars. The percentage
of AUM is based on fund performance and associated peer rankings at the share class level for U.S.-domiciled funds, at a “primary share class” level to
represent the quartile ranking for U.K., Luxembourg and Hong Kong SAR funds and at the fund level for all other funds. The performance data may have been
different if all share classes had been included. Past performance is not indicative of future results. “Primary share class” means the C share class for European
funds and Acc share class for Hong Kong SAR and Taiwan funds. If these share classes are not available, the oldest share class is used as the primary share
class. Due to a methodology change effective September 30, 2023, prior results include all long-term mutual fund assets and exclude active ETF assets.
30 In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform
with the current presentation.
31 Traditional assets includes Equity, Fixed Income, Multi-Asset and Liquidity AUM Brokerage, Administration and Custody assets under supervision.
32 AUM only for 2005. Prior period amounts have been restated to include changes in product categorization.
33 Source: Euromoney.
34 Percentage of active mutual fund and active ETF assets under management in funds rated 4- or 5-star: Mutual fund rating services rank funds based on their
60
risk adjusted performance over various periods. A 5-star rating is the best rating and represents the top 10% of industry-wide ranked funds. A 4-star rating
represents the next 22.5% of industry-wide ranked funds. A 3-star rating represents the next 35% of industry-wide ranked funds. A 2-star rating represents the
next 22.5% of industry-wide ranked funds. A 1-star rating is the worst rating and represents the bottom 10% of industrywide ranked funds. An overall
Morningstar rating is derived from a weighted average of the performance associated with a fund’s three-, five and ten- year (if applicable) Morningstar Rating
metrics. For U.S.- domiciled funds, separate star ratings are provided at the individual share class level. The Nomura “star rating” is based on three-year
risk-adjusted performance only. Funds with fewer than three years of history are not rated and hence excluded from these rankings. All ratings, the assigned
peer categories and the asset values used to derive these rankings are sourced from the applicable fund rating provider. Where applicable, the fund rating
providers redenominate asset values into U.S. dollars. The percentage of AUM is based on star ratings at the share class level for U.S.-domiciled funds, and at a
“primary share class” level to represent the star rating of all other funds, except for Japan, for which Nomura provides ratings at the fund level. The
performance data may have been different if all share classes had been included. Past performance is not indicative of future results.
35 Source: Company filings and JPMorgan Chase estimates. Rankings reflect publicly traded peer group as follows: Allianz, Bank of America, Bank of New York
Mellon, BlackRock, Charles Schwab, DWS, Franklin Templeton, Goldman Sachs, Invesco, Morgan Stanley, State Street, T. Rowe Price and UBS. JPMorgan Chase
ranking reflects Asset & Wealth Management client assets, U.S. Wealth Management investments and new-to-firm Chase Private Client deposits.
36 Source: iMoneynet.
37 Represents AUM in a strategy with at least one listed female and/or diverse portfolio manager. “Diverse” defined as U.S. ethnic minority.
JPMorgan Chase Exhibits Strength in Both Efficiency and Returns When Compared with Large Peers and
Best-in-Class Peers (page 14)
1 Bank of America Corporation (BAC), Citigroup Inc. (C), The Goldman Sachs Group, Inc. (GS), Morgan Stanley (MS) and Wells Fargo & Company (WFC).
2 Managed overhead ratio = total noninterest expense/managed revenue; revenue for GS and MS is reflected on a reported basis.
3 Best-in-class peer overhead ratio represents the comparable business segments of JPMorgan Chase (JPM) peers: Capital One Domestic Card and Consumer
Banking (COF-DC & CB), Bank of America Global Banking and Global Markets (BAC-GB & GM), Fifth Third Bank (FITB), Northern Trust Wealth Management
(NTRS-WM) and Allianz Group (ALLIANZ-AM).
4 Best-in-class all banks ROTCE represents implied net income minus preferred stock dividends of the comparable business segments of JPM peers, when
available, or of JPM peers on a firmwide basis when there is no comparable business segment: Bank of America Consumer Banking (BAC-CB), Bank of America
Global Banking and Global Markets (BAC-GB & GM), Wells Fargo & Company Commercial Banking (WFC-CB) and Morgan Stanley Wealth Management &
Investment Management (MS-WM & IM).
5 Best-in-class GSIB ROTCE represents implied net income minus preferred stock dividends of the comparable business segments of JPM GSIB peers, when
available, or of JPM GSIB peers on a firmwide basis when there is no comparable business segment: Bank of America Consumer Banking (BAC-CB), Bank of
America Global Banking and Global Markets (BAC-GB & GM), Wells Fargo & Company Commercial Banking (WFC-CB) and Morgan Stanley Wealth Management &
Investment Management (MS-WM & IM). WFC-CB is the only GSIB peer to disclose a comparable business segment to Commercial Banking.
6 Given comparisons are at the business segment level, where available; allocation methodologies across peers may be inconsistent with JPM’s.
Our Fortress Balance Sheet (page 15)

1 Tangible common equity 2005-2007 reflects common stockholders’ equity less goodwill and other intangible assets.
2 Basel III Transitional rules became effective on January 1, 2014; prior-period CET1 data is based on Basel I rules. As of December 31, 2014, the ratios represent
the lower of the Standardized or Advanced approach calculated under the Basel III Fully Phased-In basis.
3 Includes eligible High Quality Liquid Assets (HQLA) as defined in the liquidity coverage ratio (LCR) rule and unencumbered marketable securities, such as equity
and debt securities, that the Firm believes would be available to raise liquidity including excess eligible HQLA securities at JPMorgan Chase Bank, N.A. that are
not transferable to nonbank affiliates; for December 31, 2023 and 2022, the balance includes eligible end-of-period HQLA as defined in the LCR rule, issued
December 19, 2016. For December 31, 2017–2021, the balance includes average eligible HQLA. Periods prior to 2017 represent period-end balances. December
31, 2016 and 2015 balances are under the initial U.S. rule approved on September 3, 2014. The December 31, 2014 amount is estimated prior to the effective
date of the initial rule, and under the Basel III liquidity coverage ratio (Basel III LCR) for December 31, 2013.
4 2005-2012 reflect cash and cash due from banks and investment securities.
5 Capital returned to common stockholders includes common dividends and net repurchases.
Size of the Financial/Sector Industry (page 39)

1 2007 and 2010 sourced from WorldBank.org annual GDP publication. 2023 is calculated using JPM Research forecasts. Figures are represented in 2015 prices.
2 Consists of cash assets and Treasury and agency securities.
3 2023 figure is as of 3Q23.
4 Top 50 fund AUM data per Sovereign Wealth Fund Institute (SWFI).
5 Loans held by nonbank entities per the FRB Z.1 Financial Accounts of the United States.
6 U.S. money market fund investment holdings of securities issued by entities worldwide.
7 Methodology updated in 2022, previous years have been restated.
8 NYSE + NASDAQ; excludes investment funds, ETF’s unit trusts and companies whose business goal is to hold shares of other listed companies; a company with
several classes of shares is only counted once.
9 Inside Mortgage Finance and JPMorgan Chase internal data; consists of Top 50 Originators (Top 40 for 2007).
10 Preqin, Dealogic, JPM Credit Research.
61

Ceo Letter To Shareholders 2023

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Ceo Letter To Shareholders 2023

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Dear Fellow Shareholders,

In 2023, we continued to play a forceful and essential role in advancing economic

As always, we hold fast to our commitment to corporate responsibility, including

2000 2005 2010 2015 2020 2024

2000 2006 2010 2016 2020

The purchase of First

FDIC = Federal Deposit Insurance Corporation

CELEBRATING THE 20TH ANNIVERSARY OF THE BANK ONE/JPMORGAN CHASE

J.P. Morgan Chase

Adjusted net income2 $15.36

$8.5 $4.33 6% $3.96

DRAFT 3.14.24–TYPESET; 4/4/24; v.24_JD_TBVPS_03

Tangible Book Value1 and Average Stock Price per Share

 Tangible book value  Average stock price

1 10% compound annual growth rate since 2005.

DRAFT 3/13/24 — TYPESET; 4/4/24 v. 24_JD_Stock_Total_Return_03

Stock total return analysis

Bank One S&P 500 Index S&P Financials Index

Performance since becoming CEO of Bank One

JPMorgan Chase S&P 500 Index S&P Financials Index

Performance since the Bank One and JPMorgan Chase merger

Performance for the period ended December 31, 2023

Client Franchises Built Over the Long Term

Average deposits ($B) 1

2006  >90% of Fortune 500 companies do business

NA = Not available USD = U.S. dollar

For footnoted information, refer to page 60 in this Annual Report.

DRAFT 3/4/24–TYPESET; 4/4/24 v. 24_JD_new_renew_04

New and Renewed Credit and Capital for Our Clients

DRAFT 3/4/24 TYPESET; 4/4/24 v. 24_JD_assets entrusted_03

Assets Entrusted to Us by Our Clients

Daily Payment Volume1 Daily Merchant Acquiring Transactions

$9.7T1 average daily

DRAFT 3/27/24 – TYPESET: 4/7/24r1 v. 24_JD_best-in-class_peers_06

JPM 54% JPM 21%

Commercial 35% 39% 20% 19% 19%

Asset & Wealth 64% 63% 31% 58% 58%

GSIB = Global systemically important banks

For footnoted information, refer to page 61 in this Annual Report.

Tangible Common Equity (Average)1 15.0%

 Tangible common equity (average) ($B)  CET1 (%) 2 9.0% CAGR

$450 $510 $547

Capital returned to common

CAGR = Compound annual growth rate

For footnoted information, refer to page 61 in this Annual Report.

**FOOTNOTES –MOVED TO BACK PAGE

— Steadfast principles worth repeating (and one new one) Page 6

— Mapping our progreess and milestone Page 6

• Financial performance Page 9

UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY Page 17

• The critical impact of artificial intelligence Page 17

• Our journey to the cloud Page 18

• Acquiring First Republic Bank and its customers Page 18

• Navigating in a complex and potentially dangerous world Page 19

— Powering economic growth in Florida Page 28

• Protecting the essential role of market making (trading) Page 33

STAYING COMPETITIVE IN THE SHRINKING PUBLIC MARKETS Page 36

• The hijacking of annual shareholder meetings Page 36

• The undue influence of proxy advisors Page 37

• The benefits and risks of private credit Page 38

• A bank’s strength: Providing flexible capital Page 39

MANAGEMENT LESSONS: THINKING, DECIDING AND TAKING ACTION

• Benefiting from the OODA loop Page 40

Tangible book value Average stock price

Tangible common equity (average) ($B) CET1 (%) 2 9.0% CAGR