The Crucial Sentence In Jamie Dimon’s Letter To JPMorgan Shareholders
April 9, 2015 in News by RBN Staff
Source: Forbes
Halah Touryalai
4/10/2013 6:44PM
If Jamie Dimon could take it all back he would. He can’t go back and fix what happened last year but he promises–promises!–that he’ll do everything he can to make sure it never happens again.
He’s talking about the London Whale, of course. The trading loss that cost JPMorgan Chase $6 billion and its reputation as the safest big bank. The promise came in his annual letter to shareholders today. In it the chairman and CEO puts it all out there; the regrets about the London Whale fiasco, the mistakes made leading up to the loss, the lack of proper controls in place at the bank, his sadness at disappointing the regulators, lessons learned and a vow to return the bank to its place as “the safest and soundest bank on the planet.”
Dimon’s letter to shareholders is his best work yet since the London Whale mess. And it’s little surprise that it comes in the form of communication with shareholders–a group he’s always felt deserved a clear and honest explanation about the matter before others. He’s much less demure in testimony before lawmakers in Washington, for instance.
But while Dimon’s honesty, regrets and apologies are getting the most attention there’s a non-whale sentence in the letter that struck me as the most important.
I make this promise: We will be a port of safety in the next storm.
In a single sentence, Dimon is telling not just shareholders, but the world really, that another financial disaster is inevitable. When it arrives, his bank will be “a source of strength, not weakness, for the global economy” much like it was in 2007 an 2008 during the financial crisis when it bought Bear Stearns and Washington Mutual.
That’s a bold statement coming from the executive whose own reputation has been tarnished over the last year. Whether or not he’s right about JPM’s role during the next crisis is anyone’s guess but he’s dead on about another storm. The worst part about it is we don’t have our act together as a nation if the storm hits sooner than later.
Recently, it seems like the country can’t agree on much of anything; fiscal policies, tax reform, budget resolutions, social issues the list goes on. Disagreement is certainly one way to separate the good ideas from the bad and reach an optimum solution, but it cannot become self-serving and destructive. Otherwise, as Dimon says in his letter, “confidence, which usually is the secret sauce for the economy, for both individuals and companies, gets eroded.”
We’ve been at the top for so long that it’s hard to imagine what that nation would look like otherwise. But if we seriously considered that outcome, where we no longer lead as the world’s biggest economy nor its strongest or most innovative, then perhaps we’d be more willing to agree to solutions as unit rather than self-serving groups.
“Great potential and past glory do not guarantee future success,” Dimon, who learned that the hard way, says in his letter. He adds, “This is true for companies, and it is true for countries. America does not have a divine right to success–we have some serious issues to address.”
Read Jamie Dimon’s full letter to JPMorgan shareholder here.