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1、Powering Growth with Curiosity and HeartAnnual Report 2023Financial HighlightsAs of or for the year ended December 31,(in millions,except per share,ratio data and employees)2023 2022 2021Selected income statement dataTotal net revenue$158,104$128,695$121,649Total noninterest expense 87,172 76,140 71

2、,343 Pre-provision profit(a)70,932 52,555 50,306Provision for credit losses 9,320 6,389 (9,256)Net income$49,552$37,676$48,334Per common share data Net income per share:Basic$16.25$12.10$15.39 Diluted 16.23 12.09 15.36Book value per share 104.45 90.29 88.07Tangible book value per share(TBVPS)(a)86.0

3、8 73.12 71.53Cash dividends declared per share 4.10 4.00 3.80Selected ratiosReturn on common equity 17%14%19%Return on tangible common equity(ROTCE)(a)21 18 23Liquidity coverage ratio(average)(b)113 112 111 Common equity Tier 1 capital ratio(c)15.0 13.2 13.1Tier 1 capital ratio(c)16.6 14.9 15.0Total

4、 capital ratio(c)18.5 16.8 16.8Selected balance sheet data(period-end)Loans$1,323,706$1,135,647$1,077,714Total assets 3,875,393 3,665,743 3,743,567Deposits 2,400,688 2,340,179 2,462,303Common stockholders equity 300,474 264,928 259,289Total stockholders equity 327,878 292,332 294,127Market data Clos

5、ing share price$170.10$134.10$158.35Market capitalization 489,320 393,484 466,206Common shares at period-end 2,876.6 2,934.2 2,944.1Employees(d)309,926(e)293,723 271,025As of and for the period ended December 31,2023,the results of the Firm include the impact of First Republic.Refer to Business Segm

6、ent Results on page 67 and Note 34 for additional information.(a)Pre-provision profit,TBVPS and ROTCE are each non-GAAP financial measures.Refer to Explanation and Reconciliation of the Firms Use of Non-GAAP Financial Measures on pages 6264 for a discussion of these measures.(b)Refer to Liquidity Ri

7、sk Management on pages 102-109 for additional information on this measure.(c)Refer to Capital Risk Management on pages 91-101 for additional information on these measures.(d)This metric,which was formerly Headcount,has been renamed Employees but is otherwise unchanged.(e)Included approximately 4,500

8、 individuals associated with First Republic who became employees effective July 2,2023.JPMorgan Chase&Co.(NYSE:JPM)is a leading financial services firm with assets of$3.9 trillion and operations worldwide.The firm is a leader in investment banking,financial services for consumers and small businesse

9、s,commercial banking,financial transaction processing and asset management.Under the J.P.Morgan and Chase brands,the firm serves millions of customers,predominantly in the U.S.,and many of the worlds most prominent corporate,institutional and government clients globally.Information about J.P.Morgans

10、 capabilities can be found at and about Chases capabilities at .Information about JPMorgan Chase&Co.is available at .2023 HighlightsCORPORATE&INVESTMENT BANKGenerated$14 billion of net income on revenue of$49 billionIN DEPOSITS AND FOR SMALL BUSINESSESNamed#1 in retail deposit market share and#1 pri

11、mary bank for U.S.small businessesDISABILITY EQUALITY INDEXScored 100%on the Disability Equality Index for the ninth consecutive yearMOST ADMIRED COMPANIESRanked in the top five on Fortune magazines Most Admired Companies list for the second year in a rowIN ARTIFICIAL INTELLIGENCERanked#1 for overal

12、l artificial intelligence capabilities on the Evident AI Index for the second year in a rowMIDDLE MARKET SYNDICATED LENDERRanked#1 overall Middle Market Syndicated Lender in the U.S.CUSTOMER SATISFACTIONRanked#1 among self-directed investors in the J.D.Power 2023 U.S.Wealth Management Digital Experi

13、ence StudyMOST INFLUENTIAL COMPANIESRanked as one of the 100 Most Influential Companies by Time magazinePRIVATE BANK AND ASSET MANAGERNamed#1 private bank in the world by Euromoney magazine and#1 asset manager by active flows#1#1 BANK#1 BANK#1#1 100%TOP 5TOP 100#11Dear Fellow Shareholders,Across the

14、 globe,2023 was yet another year of significant challenges,from the terrible ongoing wars 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,i

15、ncluding 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 Ukr

16、ainian people,escalating tragedy in the Middle East and the potential restructuring of the global order are far more important.As these events unfold,Americas global leadership role is being challenged outside by other nations and inside by our polarized electorate.We need to find ways to put aside

17、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 al

18、l men are Jamie Dimon,Chairman and Chief Executive Officer2created 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 s

19、pite of the unsettling landscape,including last years 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

20、 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.Furt

21、hermore,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

22、 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

23、 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

24、 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 sig

25、nificant 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 resu

26、lt 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

27、to the franchise);the Corporate&Investment Bank(CIB)1 Represents managed revenue.3maintained 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 Ba

28、nk),roughly doubling the prior years 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 capi

29、tal 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 t

30、he 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 th

31、e 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 St

32、eadfast 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 915 show our performance results and illustrate how we have grown our franchises,how we compare with our competitors and

33、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 companys resiliency and of what our hundreds of thousands of employees around the world

34、 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 bankings essential role in a community its potential for bringing people tog

35、ether,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 4STEADFAST PRINCIPLES WORTH REPEATING(AND ONE NEW ONE)Looking back on the past two+decades starting from my time as Chairm

36、an and CEO of Bank One in 2000 there is one common theme:our unwavering dedica-tion to help clients,communities and countries throughout the world.It is clear that our financial discipline,constant investment in innovation and ongoing development of our people have enabled us to achieve this consist

37、ency and com-mitment.In addition,across the firm,we uphold certain steadfast tenets that are worth repeating.First,our work has very real human impact.While JPMorgan Chase stock is owned by large institutions,pension plans,mutual funds and directly by single investors,in almost all cases the ultimat

38、e beneficiaries are individuals in our com-munities.More than 100 million people in the United States own stocks;many,in one way or another,own JPMorgan Chase stock.Frequently,these shareholders are veterans,teachers,police officers,fire-fighters,healthcare workers,retirees,or those saving for a hom

39、e,education or retirement.Often,our employees also bank these shareholders,as well as their families and their companies.Your man-agement team goes to work every day recognizing the enormous responsibility that we have to all of our shareholders.Second,shareholder value can be built only if you main

40、tain a healthy and vibrant company,which means doing a good job of taking care of your customers,employ-ees and communities.Conversely,how can you have a healthy company if you neglect any of these stakeholders?As we have learned over the past few years,there are myriad ways an institution can demon

41、strate its compassion for its employees and its communities while still strengthening shareholder value.Third,while we dont run the company worrying about the stock price in the short run,in the long run we consider our stock price a measure of our progress over time.This progress is a function of c

42、ontinual investments in our people,systems and products,in good and bad times,to build our capabilities.These important invest-ments will also drive our companys future prospects and position it to grow and prosper for decades.Measured by stock performance,our progress is exceptional.For example,whe

43、ther looking back 10 years or even farther to 2004,when the JPMorgan Chase/Bank One merger took place,we have outperformed the Standard&Poors 500 Index and the Standard&Poors Financials Index.Fourth,we are united behind basic princi-ples and strategies(you can see the prin-ciples for How We Do Busin

44、ess on our website and our Purpose statement in my letter from last year)that have helped build this company and made it thrive.These allow us to maintain a fortress bal-ance sheet,constantly invest and nurture talent,fully satisfy regulators,continually improve risk,governance and controls,and serv

45、e customers and clients while lifting up communities worldwide.This philosophy is embedded in our company culture and influences nearly every role in the firm.Fifth,we strive to build enduring busi-nesses,which rely on and benefit from one another,but we are not a conglomerate.This structure helps g

46、enerate our superior returns.Nonetheless,despite our best efforts,the walls that protect this com-pany are not particularly high and we face extraordinary competition.I have written about this reality extensively in the past and cover it again in this letter.We recognize our strengths and vulnerabil

47、i-ties,and we play our hand as best we can.Sixth,and this is the new one,we must be a source of strength,particularly in tough times,for our clients and the countries in which we operate.We must take seriously our role as one of the guardians of the worlds financial systems.Seventh,we operate with a

48、 very important silent partner the U.S.government noting as my friend Warren Buffett points out that his companys success is predi-cated upon the extraordinary conditions our country creates.He is right to say to his shareholders that when they see the American flag,they all should say thank you.We

49、should,too.JPMorgan Chase is a healthy and thriving company,and we always want to give back and pay our fair share.We do pay our fair share and we want it to be spent well and have the greatest impact.To give you an idea of where our taxes and fees go:In the last 10 years,we paid more than$46 billio

50、n in federal,state and local taxes in the United States and over$22 billion in taxes outside of the United States.Additionally,we paid the Federal Deposit Insurance Corporation over$10 billion so that it has the resources to cover failure in the American banking sector.Our partner the federal govern

51、-ment also imposes significant regula-tions upon us,and it is imperative that we meet all legal and regulatory require-ments imposed on our company.Eighth and finally,we know the founda-tion of our success rests with our people.They are the front line,both individually and as teams,serving our custo

52、mers and communities,building the technology,making the strategic decisions,managing the risks,determining our investments and driving innovation.However you view the world its complexity,risks and opportunities a companys prosperity requires a great team of people with guts,brains,integrity,enormou

53、s capabili-ties and high standards of professional excellence to ensure its ongoing success.52000 Jamie Dimon joins Bank One as Chairman and CEOChase Manhattan buys J.P.Morgan&Co.,forming J.P.Morgan Chase&Co.2004 Bank One merges with J.P.Morgan Chase&Co.2006JPMorgan Chase holds first Investor DayAss

54、et&Wealth Management assets under management exceed$1 trillion2008JPMorgan Chase acquires Bear Stearns and Washington MutualThe collapse of the housing and mortgage markets led to a severe worldwide financial crisis,the worst since the Great Depression.JPMorgan Chase helped stabilize the markets by

55、acquiring two failing institutions,Bear Stearns and Washington Mutual(WaMu).WaMu is still the largest failure of an insured depository institution in the history of the FDIC.Importantly,the WaMu deal expanded the banks network by more than 2,200 branches,including gaining a footprint in California a

56、nd Florida.JPMorgan Chase ranks#1 in investment banking fees market share for the first time2010JPMorgan Chase launches Chase Wealth Management2011JPMorgan Chase ranks#1 in Markets revenue market share for the first timeJamie Dimon holds his first bus tour from Seattle to San DiegoJPMorgan Chase bec

57、omes the biggest U.S.bank by assets2012Chase becomes#1 credit card issuer based on outstandings2014JPMorgan Chase makes historic investment in Detroit,which reached$200 million in 2022JPMorgan Chase begins using artificial intelligence and machine learning for fraud detection2016JPMorgan Chase becom

58、es the biggest bank in the world by market capitalization2018Chase credit and debit card sales volume surpasses$1 trillionJPMorgan Chase announces$30 million investment in Greater Paris,followed by$70 million in new commit-ments in 2023 to create economic opportunity across France JPMorgan Chase ann

59、ounces branch expansion initiative2019 JPMorgan Chase launches the Second Chance hiring initiative,helping remove barriers to employment opportunities for people with a criminal record2020JPMorgan Chase announces its$30 billion Racial Equity CommitmentWith the goal of helping to close the racial wea

60、lth gap and advance economic inclusion among historically underserved U.S.communities,the effort reported over$30 billion in progress by the end of 2023.Jamie Dimon returns to work in the ofce in JuneFour modern,private cloud-based North American data centers go live2021JPMorgan Chase ranks#1 in ret

61、ail deposits market share at 10%based on FDIC data,with deposits surpassing$1 trillion2022Chase becomes the first bank with nationwide branches in all lower 48 states 2023JPMorgan Chase acquires First Republic Bank from the FDICThe purchase of First Republic helped stabilize and strengthen the U.S.f

62、inancial 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 Corporation200020052010201520202024MAPPING OUR PROGRESS AND MILESTONES6and has impact.United by our principles and purpose,we hel

63、p 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

64、 of the importance of our values.CELEBRATING THE 20TH ANNIVERSARY OF THE BANK ONE/JPMORGAN CHASE MERGERJ.P.Morgan ChaseBy 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.an

65、d,most recently,J.P.Morgan&Company.And some of their predecessor companies stretched back into the 1800s,one even into the late 1700s.Bank OneBank 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 whe

66、n 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

67、 in the United States.But the merger didnt 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 s

68、tory begins.A merger 20 years ago helped transform two giant banksFast forward to 2003,and another wave of consolidation was well underway in U.S.banking.Most of the nations larger banks were trying to position themselves to be an“endgame winner.”In the biggest deal,Bank of America agreed to buy Fle

69、etBoston 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.7But they were hardly alone.In 2003,some 215 deals were announced among U.S.commercial banks and bank holding companies f

70、or 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 wo

71、rld 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,

72、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

73、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

74、 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

75、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.89?Net income?Diluted earnings per shar

76、e(EPS)?Return on tangible common equity(ROTCE)2023202220212020201920182017201620152014201320122011201020092008200720062005$8.5$15.4$17.4$19.0$21.3$17.9$21.7$24.4$14.4$24.7$24.4$26.9$38.4$36.4$37.7$49.6$48.3$32.5?15%24%22%6%10%15%15%15%11%13%13%12%17%19%14%23%18%21%13%?$4.00$4.33$1.35$2.26$3.96$4.48$

77、5.19$4.34$5.29$6.00$6.31$10.72$15.36$12.09$16.23?$8.88?$9.00$6.19$2.35$5.6$11.7$29.1$39.11 Effective January 1,2020,the Firm adopted the Financial Instruments-Credit Losses accounting guidance.Firmwide results excluding the net impact of reserve release/(build)of($9.3)billion and$9.2 billion for the

78、 years ending 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 principlesAdjusted net income2Net income excluding rese

79、rve release/build1Adjusted ROTCE2 was 13.6%for 2017ROTCE excluding reserve release/build1 was 19.3%for 2020 and 18.5%for 2021Earnings,Diluted Earnings per Share and Return on Tangible Common Equity20052023($in billions,except per share and ratio data)10Tangible Book Value1 and Average Stock Price pe

80、r Share20052023?Tangible book value?Average stock price 2023202220212020201920182017201620152014201320122011201020092008200720062005$60.98$66.11$71.53$73.12$86.08$56.33$16.45$18.88$21.96$22.52$27.09$30.12$33.62$38.68$40.72$44.60$48.13$51.44$53.56$36.07$43.93$47.75$39.83$35.49$40.36$39.36$39.22$51.88

81、$58.17$63.83$65.62$113.80$106.52$155.61$128.13$144.05$110.72$92.01 High:$170.69 Low:$123.111 10%compound annual growth rate since 2005.Stock total return analysisBank OneS&P 500 IndexS&P Financials IndexPerformance since becoming CEO of Bank One(3/27/200012/31/2023)1Compounded annual gain12.1%6.9%4.

82、9%Overall gain1,400.7%389.7%209.7%JPMorgan ChaseS&P 500 IndexS&P Financials IndexPerformance since the Bank One and JPMorgan Chase merger(7/1/200412/31/2023)Compounded annual gain10.9%9.8%4.7%Overall gain647.3%514.7%146.7%Performance for the period ended December 31,2023 Compounded annual gain One y

83、ear30.7%26.3%12.1%Five years15.2%15.7%12.0%Ten years14.4%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&Poors 500 Index(S&P 500 Index)and the Standard&Poors Financials Index(S&P Financials Inde

84、x).1 On March 27,2000,Jamie Dimon was hired as CEO of Bank One.11 2005 2013 20222023Consumer&CommunityBankingAverage deposits($B)1Deposits market share2#of top 50 markets where we are#1(top 3)Business Banking primary market share3Client investment assets($B)1Total payments volume($T)4%of digital non

85、-card payments5Credit card sales($B)Debit card sales($B)Debit and credit card sales volume($B)Credit card sales market share6Credit card loans($B,EOP)Credit card loans market share7Active mobile customers(M)#of branches#of advisors1$187 4.5%6(12)4.0%NA NA 20%$225 NA NA 15%$142 19%NA 2,641 NM$453 7.5

86、%7(22)6.8%$189$1.4 45%$419$224$664 21%$128 17%15.6 5,630 3,044$1,163 10.9%11(25)9.3%$647$5.6 77%$1,065$491$1,555 22%$185 17%49.7 4,787 5,029$1,127 11.3%12(26)9.5%$951$5.9 79%$1,164$515$1,679 23%$211 17%53.84,8975,456 Serve 82 million U.S.consumers and 6.4 million small businesses 67 million active d

87、igital customers8,including 54 million active mobile customers9 Primary bank relationships for 80%of consumer checking accounts#1 retail deposit share#1 deposit market share position in 4 out of the 5 largest banking markets in the country(NY,LA,Chicago,and San Francisco),while maintaining branch pr

88、esence in all contiguous 48 U.S.states#1 primary bank for U.S.small businesses#1 U.S.credit card issuer based on sales and outstandings10#1 owned mortgage servicer11#1 bank auto lender12 Corporate&InvestmentBankTotal Markets revenue13Market share13 FICC13 Market share13 Equities13 Market share13Glob

89、al investment banking fees14 Market share14Assets under custody(AUC)($T)Average client deposits($B)15Firmwide Payments revenue($B)16Firmwide Payments revenue rank (share)17Firmwide average daily securitypurchases and sales($T)2006#8 6.3%#7 7.0%#8 5.0%#2 8.7%$10.7$155$4.9 NA NA#1 9.0%#1 9.6%#3 7.9%#1

90、 8.7%$20.5$384$7.8 NA NA#1 11.5%#1 10.8%#1 12.9%#1 7.8%$28.6$687$13.9#1(8.1%)$3.1#1 11.4%#1 11.0%#2 12.3%#1 8.8%$32.4$645$18.2 Co-#1(9.0%)$3.0 90%of Fortune 500 companies do business with us Presence in over 100 markets globally#1 in global investment banking fees for the 15th consecutive year14 Con

91、sistently ranked#1 in Markets revenue since 201113 J.P.Morgan Research ranked as the#1 Global Research Firm,#2 Global Equity Research Team and#1 Global Fixed Income Research Team18#1 in USD payments volume19 27.1%USD SWIFT market share20#1 in U.S.Merchant volume processing21#3 Custodian globally by

92、revenue22Commercial Banking#of top 75 MSAs with dedicated teams23#of bankersNew relationships(gross)24Average loans($B)Average deposits($B)Gross investment banking revenue($B)25Multifamily lending26 36 1,208 NA$48.1$66.1$0.6#29 52 1,242 NA$132.0$198.4$1.7#1 69 2,360 2,277$223.7$294.2$3.0#1 72 2,888

93、4,940$268.3$267.8$3.4#1 151 locations across the U.S.and 39 international locations,with 16 new cities added in 2023$2.2B revenue from Middle Market expansion markets,up 45%YoY Credit,banking and treasury services to 34K Commercial&Industrial clients and 36K real estate owners and investors 18 speci

94、alized industry coverage teams#1 overall Middle Market Bookrunner in the U.S.27 Approximately 28,000 incremental affordable housing units financed in 202328Asset&Wealth ManagementJPMAM LT funds AUM performed above peer median(10Y)29Client assets($T)30Traditional assets($T)30,31Alternatives assets($B

95、)30,32Average deposits($B)30Average loans($B)30#of Global Private Bank client advisors30Global Private Bank(Euromoney)33 NA$1.1$1.0$74$42$27 1,484#5 80%$2.3$1.9$207$135$83 2,512#3 90%$4.0$3.4$372$261$216 3,137#1 83%$5.0$4.4$411$216$220 3,515#1 166 funds with a 4/5 star rating34 Business with 59%of t

96、he worlds largest pension funds,sovereign wealth funds and central banks#2 in 5-year cumulative net client asset flows35 Positive client asset flows in 2023 across all regions and channels,with strength in liquidity,fixed income,equity,custody and brokerage#2 in Active ETF AUM and flows#1 in Institu

97、tional Money Market Funds AUM36 54%of Asset Management AUM managed by female and/or diverse portfolio managers37NA=Not available USD=U.S.dollar NM=Not meaningful YoY=Year-over-year AUM=Assets under management M=MillionsEOP=End of period B=Billions FICC=Fixed income,currencies and commodities T=Trill

98、ionsJPMAM=J.P.Morgan Asset Management K=ThousandsMSA=Metropolitan statistical area For footnoted information,refer to pages 60-61 in this Annual Report.Client Franchises Built Over the Long Term12New and Renewed Credit and Capital for Our Clients20052023($in billions)1 Government,government-related

99、and nonprofits available starting in 2019;included in Corporate clients and Small Business,Middle Market and Commercial clients for prior years.?Corporate clients?Small Business,Middle Market and Commercial clients?Consumers?Government,government-related and nonprofits1 20232022202120202019201820172

100、01620152014201320122011201020092008200720062005$1,088$167$312$1,115$136$243$1,158$167$252$1,392$222$252$1,264$1,519$281$309$275$274$1,494$1,577$1,866$1,820$2,102$1,693$399$265$2,357$1,619$430$258$2,307$1,789$480$227$2,496$1,346$440$226$333$288$216$250$615$2,345$3,186$2,410$1,294$463$244$262$641$1,92

101、6$1,329$205$239$590$2,265$1,231$331$2,263$1,443$368$233$2,044$1,621$326$197$2,144$1,567$1,900 estimated1 Represents assets under management,as well as custody,brokerage,administration and deposit accounts.2 Represents activities associated with the safekeeping and servicing of assets.Assets Entruste

102、d to Us by Our Clients20052023?Client assets?Wholesale deposits?Consumer deposits2023202220212020201920182017201620152014201320122011201020092008200720062005$1,883$730$398$2,061$755$439$2,329$824$464$2,376$861$503$2,353$2,427$722$757$558$618$3,255$3,617$3,740$3,633$3,802$3,781$4,240$1,186$1,209$959$

103、1,132$5,926$6,580$5,292$1,306$1,095$7,693$4,488$1,314$1,148$6,950$3,258$844$718$4,820$2,740$792$679$4,211$2,783$784$660$4,227$3,011$1,881$558$372$2,811$1,743$573$365$2,681$1,415$648$361$2,424$1,513$520$221$2,254$1,296$425$214$1,935$1,107$364$191$1,6622023202220212020201920182017201620152014201320122

104、011201020092008200720062005$16.9$18.8$20.5$13.2$10.7$13.9$15.9$14.9$16.1$20.5$19.9$20.5$23.5$23.2$26.8$33.2$32.4$31.0$28.6Deposits and client assets1($in billions)Assets under custody2($in trillions)1314JPMorgan Chase Exhibits Strength in Both Efficiency and Returns When Compared with Large Peers an

105、d Best-in-Class Peers1EfficiencyReturnsOverhead ratio2ROTCEJPMorgan ChaseEfficiencyReturns JPM 2023 overhead ratioBest-in-class peer overhead ratio3JPM 2023ROTCEBest-in-class all banks ROTCE4,6Best-in-class GSIB ROTCE5,6Consumer&Community Banking50%50%COF-DC&CB38%28%BACCB28%BACCBCorporate&Investment

106、 Bank59%55%BAC-GB&GM13%16%BAC-GB&GM16%BAC-GB&GMCommercial Banking35%39%FITB20%19%WFCCB19%WFCCBAsset&Wealth Management64%63%NTRS-WM&ALLIANZ-AM31%58%MS-WM&IM58%MS-WM&IMGSIB=Global systemically important banks ROTCE=Return on tangible common equityFor footnoted information,refer to page 61 in this Annu

107、al Report.*FOOTNOTES MOVED TO BACK PAGE24_JD_best-in-class_peers_07DRAFT 4/5/24 TYPESET:4/8/24r1 v.24_JD_best-in-class_peers_0777%75%72%67%66%54%MSGSCBACWFCJPM5%8%13%13%13%21%CGSMSWFCBACJPMDaily Payment Volume1(#in millions,average)Daily Merchant Acquiring Transactions(#in millions,average)1 Based o

108、n 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=TrillionsMore than double 2010202320222021202020192018

109、2017201620232022202120202019201820172016113.4 124.8 90.1 102.4 82.472.1 62.3 55.0 52.6 56.645.7 49.2 39.337.4 34.6 32.7 20232022202120202019201820172016113.4 124.8 90.1 102.4 82.472.1 62.3 55.0$9.7T1 average daily value processed15Our Fortress Balance Sheet20052023?Cash,deposits with banks,and inves

110、tment securities($B)4?Average loans/Cash,deposits with banks,and investment securities(%)?Liquid assets($B)?Average loans/Liquid assets(%)202320222021202020192018201720162015201420132012201120102009200820072006200590%132%136%192%152%159%350%311%387%80%106%110%118%129%115%86%70%63%77%$804$547$510$366

111、$450$371$137$146$106$921$745$786$768$755$860$1,652$1,447$1,437$1,4302023202220212020201920182017201620152014201320122011201020092008200720062005$124$136$149$80$56$49$63$95$111$161$170$180$185$183$187$203$230$191$20410.1%11.0%10.7%7.3%7.0%7.0%7.0%8.8%9.8%10.2%11.6%12.2%12.1%12.0%12.4%15.0%13.1%13.1%1

112、3.2%?Tangible common equity(average)($B)?CET1(%)2 9.0%CAGRsince 2005Tangible Common Equity(Average)1($in billions)Liquid Assets3($in billions)2005 2006 20072008 200920102011201220132014201520162017201820192020202120222023Net income applicable to common stockholders($B)$8.5$14.4$14.9$4.7$8.8$15.8$17.

113、6$19.9$16.6$20.1$22.4$22.6$22.6$30.7$34.6$27.4$46.5$35.9$47.8Capital returned to common stockholders($B)5$6.3$5.0$9.5($11.8)($6.4)$1.1$10.8$4.5$9.2$9.6$10.8$14.4$22.0$27.9$34.0$16.3$28.5$13.2$19.8ROTCE(%)15%24%22%6%10%15%15%15%11%13%13%13%12%17%19%14%23%18%21%DRAFT 3/4/24 TYPESET:4/7/24r1 v.24_JD_fo

114、rtress balance_10*FOOTNOTES MOVED TO BACK PAGECAGR=Compound annual growth rateCET1=Common equity Tier 1ROTCE=Return on tangible common equityFor footnoted information,refer to page 61 in this Annual Report.Within this letter,I discuss the following:INTRODUCTION Summary of our 2023 results and the pr

115、inciples that guide us Steadfast principles worth repeating(and one new one)Mapping our progress and milestones Celebrating the 20th anniversary of the Bank One/JPMorgan Chase merger Financial performanceUPDATE ON SPECIFIC ISSUES FACING OUR COMPANY The critical impact of artificial intelligence Our

116、journey to the cloud Acquiring First Republic Bank and its customers Navigating in a complex and potentially dangerous world Our extensive community outreach efforts,including diversity,equity and inclusion What we learned:A five-point action plan to move forward on the climate challenge Powering ec

117、onomic growth in Florida Giving the bank regulatory and supervisory process a serious review Protecting the essential role of market making(trading)STAYING COMPETITIVE IN THE SHRINKING PUBLIC MARKETS The pressure of quarterly earnings compounded by bad accounting and bad decisions The hijacking of a

118、nnual shareholder meetings The undue influence of proxy advisors The benefits and risks of private credit A banks strength:Providing flexible capitalMANAGEMENT LESSONS:THINKING,DECIDING AND TAKING ACTION DELIBERATELY AND WITH HEART Benefiting from the OODA loop Decision making and acting(have a proc

119、ess)The secret sauce of leadership(have a heart)A PIVOTAL MOMENT FOR AMERICA AND THE FREE WESTERN WORLD:STRATEGY AND POLICY MATTER Coalescing the Western world A uniquely American task Strengthening our position with a comprehensive,global economic security strategy Providing strong leadership globa

120、lly and effective policymaking domestically Managers Journal:“A Politicians Dream Is a Businessmans Nightmare”Out of the labyrinth,with focus and resolve We should have more faith in the amazing power of our freedoms How we can help lift up our low-income citizens and mend Americas torn social fabri

121、cPage 2Page 2Page 5Page 6Page 7Page 9Page 17Page 17Page 18Page 18Page 19Page 21Page 26Page 28Page 30Page 33Page 36Page 36Page 36Page 37Page 38Page 39 Page 40 Page 40Page 41Page 42 Page 44 Page 45Page 47Page 50Page 52Page 55Page 56Page 5716Update on Specific Issues Facing Our CompanyEach year,I try t

122、o update you on some of the most important issues facing our company.First and foremost may well be the impact of artificial intel-ligence(AI).While we do not know the full effect or the precise rate at which AI will change our business or how it will affect society at large we are completely convin

123、ced the consequences will be extraordinary and possibly as transformational as some of the major technological inventions of the past several hundred years:Think the printing press,the steam engine,electricity,computing and the Internet,among others.THE CRITICAL IMPACT OF ARTIFICIAL INTELLIGENCE Sin

124、ce the firm first started using AI over a decade ago,and its first mention in my 2017 letter to shareholders,we have grown our AI organization materially.It now includes more than 2,000 AI/machine learning(ML)experts and data scientists.We continue to attract some of the best and brightest in this s

125、pace and have an exceptional firmwide AI/ML and Research department with deep expertise.We have been actively using predictive AI and ML for years and now have over 400 use cases in production in areas such as marketing,fraud and risk and they are increasingly driving real busi-ness value across our

126、 businesses and functions.Were also exploring the potential that generative AI(GenAI)can unlock across a range of domains,most notably in software engineering,customer service and operations,as well as in general employee productivity.In the future,we envision GenAI helping us reimagine entire busin

127、ess work-flows.We will continue to experiment with these AI and ML capabilities and implement solutions in a safe,responsible way.While we are investing more money in our AI capa-bilities,many of these projects pay for themselves.Over time,we anticipate that our use of AI has the potential to augmen

128、t virtually every job,as well as impact our workforce composition.It may reduce certain job categories or roles,but it may create others as well.As we have in the past,we will aggressively retrain and redeploy our talent to make sure we are taking care of our employees if they are affected by this t

129、rend.Finally,as a global leader across businesses and regions,we have large amounts of extraordinarily rich data that,together with AI,can fuel better insights and help us improve how we manage risk and serve our customers.In addition to making sure our data is high quality and easily accessible,we

130、need to complete the migration of our analyti-cal data estate to the public cloud.These new data platforms offer high-performance compute power,which will unlock our ability to use our data in ways that are hard to contemplate today.Recognizing the importance of AI to our business,we created a new p

131、osition called Chief Data&Analytics Officer that sits on our Operating Committee.Elevating this new role to the Operating Committee level reporting directly to Daniel Pinto and me reflects how critical this function will be going for-ward and how seriously we expect AI to influence our business.This

132、 will embed data and analytics into our decision making at every level of the com-pany.The primary focus is not just on the technical aspects of AI but also on how all management can and should use it.Each of our lines of business has corresponding data and analytics roles so we can share best pract

133、ices,develop reusable solutions that solve multiple business problems,and continu-ously learn and improve as the future of AI unfolds.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY17Clearly,AI comes with many risks,which need to be rigorously managed.We have a robust,well-established risk and control

134、framework that helps us proactively stay in front of AI-related risks,particularly as the regulatory landscape evolves.And we will,of course,continue to work hard with our regulators,clients and sub-ject matter experts to make sure we maintain the highest ethical standards and are transparent in how

135、 AI helps us make decisions;e.g.,to counter bias among other things.You may already be aware that there are bad actors using AI to try to infiltrate companies sys-tems to steal money and intellectual property or simply to cause disruption and damage.For our part,we incorporate AI into our toolset to

136、 counter these threats and proactively detect and mitigate their efforts.OUR JOURNEY TO THE CLOUDGetting our technology to the cloud whether the public cloud or the private cloud is essential to fully maximize all of our capabilities,including the power of our data.The cloud offers many benefits:1)i

137、t accelerates the speed of delivery of new ser-vices;2)it simultaneously reduces the cost of com-pute power and enables,when needed,an extraor-dinary amount of compute capability called burst computing;3)it provides that compute capa-bility across all of our data;and 4)it allows us to be able to con

138、stantly and quickly adopt new tech-nologies because updated cloud services are con-tinually being added more so in the public cloud,where we benefit from the innovation that all cloud providers create,than in the private cloud,where innovation is only our own.Of course,we are learning a lot along th

139、e way.For example,we know we should carefully pick which applications and which data go to the public cloud versus the private cloud because of the expense,security and capabilities required.In addition,it is critical that we eventually use multi-ple clouds to avoid lock-in.And we intend to main-tai

140、n our own expertise so that were never reliant on the expertise of others even if that requires additional money.We invested approximately$2 billion to build four new,modern,private cloud-based,highly reliable and efficient data centers in the United States(we have 32 data centers globally).To date,

141、about 50%of our applications run a large part of their pro-cessing in the public or private cloud.Approxi-mately 70%of our data is now running in the pub-lic or private cloud.By the end of 2024,we aim to have 70%of applications and 75%of data moved to the public or private cloud.The new data cen-ter

142、s are around 30%more efficient than our exist-ing legacy data centers.Going to the public cloud can provide 30%additional efficiency if done cor-rectly(efficiency improves when your data and applications have been modified,or“refactored,”to enable new cloud services).We have been con-stantly updatin

143、g most of our global data centers,and by the end of this year,we can start closing some that are larger,older and less efficient.ACQUIRING FIRST REPUBLIC BANK AND ITS CUSTOMERSThe purchase of First Republic Bank was not some-thing that we would have done just for ourselves.But the regulators relied

144、on us to step forward(we worked hand in hand with the Federal Reserve,the Federal Deposit Insurance Corporation(FDIC)and the U.S.Treasury),and the purchase of First Republic helped stabilize and strengthen the U.S.financial system in a time of crisis.The acquisition of a major company entails a lot

145、of complexity.People tend to focus on the financial and economic outcomes,which is a reasonable thing to do.And in the case of First Republic,the numbers look rather good.We recorded an accounting gain of$3 billion on the purchase,and we told the world we expected to add more than$500 million to ear

146、nings annually,which we now believe will be closer to$2 billion.However,these results mask some of the true costs.First,approxi-mately one-third of the incremental earning was simply deploying excess capital and liquidity,which doesnt require purchasing a$300 billion bank we simply could have bought

147、$300 billion of assets.Second,as soon as the deal was announced,approximately 7,600 of our employees went from working on tasks that would benefit the future of JPMorgan Chase to working on the UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY18merger integration.Overall,the integration involves effectiv

148、ely combining more than 165 systems(e.g.,statement,deposit,accounting and human resources)and consolidating policies,risk reporting,and other various rules and procedures.We hope to have most of the integration done by the middle of 2024.Fortunately,we were very familiar and comfort-able with all of

149、 the assets we were acquiring from First Republic.What we didnt take on was First Republics excessive interest rate exposure one of the reasons it failed which we effectively hedged within days of the acquisition.Our people did a great job of respectfully manag-ing this transition,knowing that circu

150、mstances were particularly tough for our new colleagues,whom we tried to welcome with open arms.We did everything we could to redeploy individuals whose jobs were lost because of the merger(we directly hired over 5,000 people).Our approach has always been to go into an acquisition knowing we can lea

151、rn things from other teams,and in this case,we did:First Republic had done an outstanding job serving high-net-worth clients and venture capital-ists,and we are developing what is effectively a new business for us following First Republics ser-vicing model.We will serve these high-net-worth clients

152、through a single point of contact,supported by a concierge service model,across our distribu-tion channels including more than 20 new J.P.Morgan branded branches.NAVIGATING IN A COMPLEX AND POTENTIALLY DANGEROUS WORLDIn the policy section,we talk about how we may be entering one of the most treacher

153、ous geopolitical eras since World War II.And I have written in the past about high levels of debt,fiscal stimulus,ongoing deficit spending and the unknown effects of quantitative tightening(which I am more wor-ried about than most)so I wont repeat those views here.However,the impacts of these geopo-

154、litical and economic forces are large and some-what unprecedented;they may not be fully under-stood until they have completely played out over multiple years.In any case,JPMorgan Chase must be prepared for the various potential impacts and outcomes on our company and our people.We remain wary of eco

155、nomic prognosticating.While all companies essentially budget on a base case forecast,we are very careful not to run our business that way.Instead,we look at a range of potential outcomes for which we need to be pre-pared.Geopolitical and economic forces have an unpredictable timetable they may unfol

156、d over months,or years,and are nearly impossible to put into a one-year forecast.They also have an unpre-dictable interplay:For example,the geopolitical situation may end up having virtually no effect on the worlds economy or it could potentially be its determinative factor.We have ongoing concerns

157、about persistent inflationary pressures and consider a wide range of outcomes to manage interest rate exposure and other business risks.Many key economic indicators today continue to be good and possibly improving,including inflation.But when looking ahead to tomorrow,conditions that will affect the

158、 future should be considered.For example,there seems to be a large number of persistent inflationary pressures,which may likely continue.All of the following factors appear to be inflationary:ongoing fiscal spending,remilitarization of the world,restructuring of global trade,capital needs of the new

159、 green econ-omy,and possibly higher energy costs in the future(even though there currently is an oversupply of gas and plentiful spare capacity in oil)due to a lack of needed investment in the energy infrastructure.In the past,fiscal deficits did not seem to be closely related to inflation.In the 19

160、70s and early 1980s,there was a general understanding that inflation was driven by“guns and butter”;i.e.,fiscal deficits and the increase to the money supply,both partially driven by the Vietnam War,led to increased inflation,which went over 10%.The deficits today are even larger and occurring in bo

161、om times not as the result of a recession and they have been supported by quantitative easing,which was never done before the great financial crisis.Quantitative easing is a form of increasing the money supply(though it has many offsets).I remain more concerned about quantita-tive easing than most,a

162、nd its reversal,which has never been done before at this scale.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY19Equity values,by most measures,are at the high end of the valuation range,and credit spreads are extremely tight.These markets seem to be pricing in at a 70%to 80%chance of a soft landing mod

163、est growth along with declining inflation and interest rates.I believe the odds are a lot lower than that.In the meantime,there seems to be an enormous focus,too much so,on monthly inflation data and modest changes to interest rates.But the die may be cast interest rates looking out a year or two ma

164、y be predetermined by all of the factors I mentioned above.Small changes in interest rates today may have less impact on inflation in the future than many people believe.Therefore,we are prepared for a very broad range of interest rates,from 2%to 8%or even more,with equally wide-ranging economic out

165、comes from strong economic growth with moderate infla-tion(in this case,higher interest rates would result from higher demand for capital)to a recession with inflation;i.e.,stagflation.Economically,the worst-case scenario would be stagflation,which would not only come with higher interest rates but

166、also with higher credit losses,lower business volumes and more difficult markets.Under these many different scenarios,our company would continue to perform at least okay.Importantly,being prepared means we can continue to help our clients no matter what the future portends.The mini banking crisis of

167、 2023 is over,but beware of higher rates and recession not just for banks but for the whole economy.When we purchased First Republic in May 2023 following the failure of two other regional banks,Silicon Valley Bank(SVB)and Signature Bank,we thought that the current banking crisis was over.Only these

168、 three banks were offsides in having the toxic combination of extreme interest rate exposure,large unrealized losses in the held-to-maturity(HTM)portfolio and highly concentrated deposits.Most of the other regional banks did not have these problems.However,we stipulated that the crisis was over prov

169、ided that interest rates didnt go up dramatically and we didnt experience a serious recession.If long-end rates go up over 6%and this increase is accompa-nied by a recession,there will be plenty of stress not just in the banking system but with leveraged companies and others.Remember,a simple 2 perc

170、entage point increase in rates essentially reduced the value of most financial assets by 20%,and certain real estate assets,specifically office real estate,may be worth even less due to the effects of recession and higher vacancies.Also remember that credit spreads tend to widen,sometimes dramatical

171、ly,in a recession.Finally,we should also consider that rates have been extremely low for a long time its hard to know how many investors and companies are truly prepared for a higher rate environment.We seek to be engaged globally and carefully manage complex countries and geopolitical issues.JPMorg

172、an Chase does business in more than 100 countries,and we have people on the ground in over 60 countries.In almost all those locations,we do research on their economy,their markets and their companies;we bank their government insti-tutions and their companies;and we bank multina-tional corporations,i

173、ncluding the U.S.multina-tional corporations within their borders.This is a critical role not only in helping those countries grow and improve but also in expanding the global economy.Many of these countries are quite complex with dif-ferent laws,customs and regulations.We are occa-sionally asked wh

174、y we bank certain companies and even certain countries,particularly when countries have some laws and customs that are counter to many of the values held in the United States.Heres why:The U.S.government sets foreign policy.And when it does,we salute.Wherever we do busi-ness,we follow the law of the

175、 United States,as it applies in that country(in addition to the laws of the country itself),in all respects.Think of trade rules,sanctions,anti-money laundering and the Foreign Corrupt Practices Act,among others.By and large,these things help improve those coun-tries.In most cases,the U.S.government

176、 does not want us to leave because it agrees,gener-ally,that the engagement of American business enhances our relationships with other countries and helps those countries themselves.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY20 Engagement makes the world a better place.We all should want the world

177、to continue to improve.Isolation and lack of engagement do not accomplish that goal.While we believe that it makes sense for the United States to push for constant improvement around the world from advocating for human rights to fighting corrup-tion this is rarely accomplished through coer-cion,and,

178、in fact,is enhanced by engagement.We need to be prepared for emerging challenges and position ourselves to under-stand them.We created a new role Head of Asia Pacific Policy and Strategic Competitiveness to focus specifically on key policy issues critical to the firms(and,in fact,the countrys)compet

179、itiveness,such as trade restrictions,supply chains and infrastructure.We also cre-ated a new strategic security forum to focus on emerging and evolving risks,including trade wars,pandemics,cybersecurity and actual wars,to name just a few.OUR EXTENSIVE COMMUNITY OUTREACH EFFORTS,INCLUDING DIVERSITY,E

180、QUITY AND INCLUSION JPMorgan Chase makes an extraordinary effort as part of our“normal”day-to-day outreach to engage with individual clients,small and midsized businesses,large and multinational firms,govern-ment officials,regulators and the press in cities all around the world.This dialogue is part

181、 of the nor-mal course of business but it is also part of build-ing trust and putting down roots in a community.We believe that companies,and banks in particu-lar,must earn the trust of the communities and countries in which they operate.We believe and we are unashamed about this that it is our obli

182、ga-tion to help lift up the communities and countries in which we do business.We believe that doing so enhances business and the general economic well-being of those communities and countries and also enhances long-term shareholder value.JPMor-gan Chase thrives when communities thrive.This approach

183、is integral to what we do,in great scale,around the world and it works.We are quite clear that whether our efforts are inspired by the goodness of our hearts(as philanthropy or venture-type investing)or good business,we try to measure the actual outcomes.Its also interesting to point out that many o

184、f our efforts were spawned from our work around Advancing Black Pathways,Military and Veterans Affairs,and our work in Detroit.While weve banked Detroit for more than 90 years,our$200 million investment in its economic recovery over the last decade demonstrated that investing in communities is a sma

185、rt business strategy.We are one of the largest banks in Detroit,from consumer banking to investment banking,and its quite clear that not only did our efforts help Detroit,but they also helped us gain market share.The extent of Detroits remarkable recovery was recently high-lighted when Moodys upgrad

186、ed the citys credit rating to investment grade an extraordinary achievement just over 10 years after the city filed the largest municipal bankruptcy in U.S.history.For JPMorgan Chase,Detroit was an incubator for developing models that help us hone how we deploy our business resources,philanthropic c

187、api-tal,skilled volunteerism,and low-cost loans and equity investments,as well as how we identify top talent to drive successful business and societal improvements.I hope that,as shareholders,you are proud of our focus on promoting opportunity for all,both within and outside our organization,which i

188、ncludes economic opportunity.Some of our initiatives are listed below.Business Resource Groups.To deepen our cul-ture of inclusion in the workplace,we have 10 Business Resource Groups(BRG)across the com-pany to connect more than 160,000 participat-ing employees around common interests,as well as to

189、foster networking and camaraderie.Groups welcome anyone allies and those with shared affinities alike.For example,some of our largest BRGs are Access Ability(employees with disabilities and caregivers),Adelante(Hispanic and Latino employees),BOLD(Black employees),NextGen(early career professionals),

190、PRIDE(LGBTQ+employees)and Women on the Move.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY21 Women on the Move.At JPMorgan Chase,they sure are!Women represent 28%of our firms senior leadership globally.In fact,our major lines of business CCB,AWM and CIB,which would be among Fortune 1000 companies on t

191、heir own are all run by women(one with a co-head who is male).More than 10 years ago,a handful of senior women at the company,on their own,started this global,firmwide,inter-nally focused organization called Women on the Move.It was so successful that we expanded the initiative beyond the company;it

192、 now empowers clients and consumers,as well as women employees and their allies,to build their careers,grow their businesses and improve their financial health.The Women on the Move BRG has more than 70,000 employees globally.Advancing Black Pathways.This comprehensive program,which just reached the

193、 five-year mark,focuses on strengthening the economic founda-tion of Black communities because we know that opportunity is not always created equally.The program does so by,among other accomplish-ments,helping to diversify our talent pipeline,providing opportunities for Black individuals to enter th

194、e workforce and gain valuable experi-ence,and investing in the financial success of Black Americans through a focus on financial health,homeownership and entrepreneurship.An important part of the programs work is achieved through our investment in Historically Black Colleges and Universities(HBCU).W

195、e now partner with 18 schools across the United States to boost recruitment connections,expand career pathways for Black students and other students,and support their long-term develop-ment and financial health.As a measure of the programs success,in four years we have made nearly 400 hires into sum

196、mer and full-time analyst and associate roles at the firm.Military and Veterans Affairs.This firmwide 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 V

197、eteran Jobs Mission(VJM),whose membership has since grown to more than 300 companies representing various industries across the United States and has hired over 900,000 veterans and military spouses.In 2023,VJM announced the creation of its Advisory Board,which is composed of 14 corporate lead-ers,t

198、o provide strategic direction and oversight of VJM as it continues to expand its commitment to support economic opportunities for veterans and military spouses,including its goal to hire 2 million veterans and 200,000 military spouses by 2030.JPMorgan Chase alone has hired in excess of 18,000 vetera

199、ns since 2011 and currently employs more than 3,100 military spouses.Creating opportunity for people with disabili-ties.The firms Office of Disability Inclusion continues to lead strategy and initiatives aimed at advancing economic opportunity for people with disabilities.In 2023,we joined lawmakers

200、 and business leaders in Washington,D.C.,to show support for passage of the Supplemental Security Income(SSI)Savings Penalty Elimination Act.Modernizing the SSI program,by updating asset limits for the first time in nearly 40 years,would allow millions of people with disabilities who receive SSI ben

201、efits the opportunity to build their savings without put-ting their essential benefits at risk.We also provided business coaching to more than 370 entrepreneurs with disabilities.Virtual call centers.When we sought to expand our customer service specialists program across the United States,we turned

202、 to Detroit,launch-ing our first virtual call center in 2022.Invest-ments in Detroits workforce development infrastructure helped us hire 90 virtual cus-tomer service specialists for a program that has outperformed many of our traditional call centers around the world.Following this suc-cess,we expa

203、nded our hiring efforts and this virtual program to Baltimore to create new jobs that jump-start careers.And now were evaluat-ing the possibility of expanding even further.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY22 Entrepreneurs of Color Fund.A critical chal-lenge we have seen in so many communi

204、ties is that traditional lending standards render too many entrepreneurs particularly entrepre-neurs of color and those serving these commu-nities ineligible for credit.In response,we helped launch the Entrepreneurs of Color Fund(EOCF)in Detroit,a lending program designed to help aspiring small busi

205、ness owners gain access to critical resources needed for growth that are often not equitably available capital,technical assistance and mentorship,among others.These challenges arent unique to Detroit so we worked with community development financial institutions to replicate the EOCF program in 10

206、markets across the United States in 2023,deploying more than 2,900 loans and$176 million in capital to underserved entrepreneurs across the country.Senior business consultants.To help entrepre-neurs and small businesses make the transition from community lending to accessing capital from traditional

207、 financial institutions,we created a new job senior business consultant to provide support.Senior business consultants in branches that focus on underserved communi-ties offer coaching and help business owners with everything from navigating access to credit to managing cash flow to generating effec

208、tive marketing.Since 2020,these consultants have mentored more than 5,500 business owners,helping them improve their operations,grow revenue and network with others in the local business community.AdvancingCities.The organizing principles that define the business and community investments we make an

209、d how we best achieve an overall impact in local economies were heavily influ-enced by our experience in Detroit.Seeing Detroits comeback begin to take shape several years ago,we created AdvancingCities to repli-cate this model for large-scale investments to other cities around the world.From San Fr

210、an-cisco to Paris to Greater Washington,D.C.,weve applied what we learned in Detroit to communi-ties where conditions are opportune for success and require deeper investments where com-munity,civic and business leaders have come together to solve problems and get results.JPMorgan Chase Service Corps

211、.Ten years ago,we launched the JPMorgan Chase Service Corps to strengthen the capacity-building of nonprofit partners.We brought employees from around the world to Detroit to assist with its recovery from creating a scoring model for a nonprofit to helping prioritize neighborhoods for develop-ment f

212、unding to devising an implementation plan for an integrated talent management system.Since that time,the Service Corps has expanded,with more than 1,500 JPMorgan Chase employees contributing 100,000 hours to support over 300 nonprofits globally.Community Centers/Branches and Community Managers.A loc

213、al bank branch,especially in a low-income neighborhood,can be successful only when it fits the communitys needs.That is why over the last several years we have shifted our approach to how we offer access to financial health education,as well as low-cost products and services to help build wealth.Sin

214、ce 2019,we have opened 16 Community Center branches,often in areas with larger Black,Hispanic or Latino populations,and have plans to open three more by the end of 2024.These branches have more space to host grassroots community events,small business mentoring sessions and financial health seminars,

215、which have been well-attended to date,over 400,000 people have taken advantage of the financial education seminars.In each of these Community Center branches,we hired a Community Manager(who acts as a local ambassador)to build relation-ships with community leaders,nonprofits and small businesses.The

216、 Community Manager concept and practice have become so successful that we have also placed these managers in many of our traditional branches in underserved communities.We now have 149 Community Managers throughout our branch network.Work skills development.Detroit showed us how talent in communitie

217、s is often overlooked.We saw this in the early days of our investment when we visited our partners at Focus:HOPE,a training program designed to help Detroiters develop skills for high-demand jobs.Quickly,it became clear that the training and education system in Detroit was disconnected from UPDATE O

218、N SPECIFIC ISSUES FACING OUR COMPANY23employers and their talent needs.By investing in programs like Focus:HOPE,we have been able to help bridge local skills gaps by training people for in-demand jobs in communities like Dallas,Miami and Washington,D.C.Between 2019 and 2023,we supported more than 2

219、mil-lion people through our extensive learning and career programming around the world.Increasing our rural investment.We are proud to be the only bank with branches in all 48 con-tiguous states,which include many rural com-munities.Nearly 17 million consumers living in rural areas hold over$100 bil

220、lion in deposits with us and$175 billion in loans.We are also a leading wholesale lender in these communities,helping to fuel local economies through relation-ships with local companies,governments,hospi-tals and universities.Since 2019,we have made material progress in extending our footprint to re

221、ach more rural Americans,including expand-ing our branch network into 13 new states with large rural populations.Now we are raising the bar.With our new strategy,we have a goal to have a branch available to serve 50%of a states population within an acceptable driving dis-tance,including in heavily r

222、ural states such as Alabama and Iowa.This focus is part of our recently announced plan to build an additional 500 branches and hire 3,500 employees over the next three years.Through this expansion,we will partner across lines of business and our Corporate Responsibility organization to help advance

223、inclusive economic growth and bring the full force of the firm to Americas heartland.Weve nearly completed our five-year,$30 billion Racial Equity Commitment it will now become a permanent part of our business.What began in 2020 as a five-year,$30 billion commitment is now transforming into a consis

224、tent business practice for our lines of business in support of Black,Hispanic,Latino and other underserved communities.By the end of 2023,we reported over$30 billion in progress toward our original goal.However,our focus is not on how much money is deployed but on long-term impact and outcomes.And g

225、oing forward,these programs will be embedded in our business-as-usual operating system.Affordable rental housing.Through our Affordable Housing Preservation program,we approved program funding to date of approxi-mately$21 billion in loans to incentivize the preservation of over 190,000 affordable ho

226、using rental units across the United States.Addition-ally,we financed approximately$5 billion for the construction and rehabilitation of affordable rental housing.Homeownership.In 2023,we expanded our$5,000 Chase Homebuyer Grant program to include over 15,000 majority Black,Hispanic and Latino commu

227、nities and in January 2024,we increased our grant amount to$7,500 in select markets.Since our grant program began in 2021,we have provided about 8,600 grants totaling$43 million.We also have provided home purchase and refinance loans in 2023 worth over$4.6 billion for more than 14,000 Black,Hispanic

228、 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.UPDATE

229、ON SPECIFIC ISSUES FACING OUR COMPANY24 Supplier diversity.In 2023,our firm spent approximately$2.3 billion directly with diverse suppliers an increase of 10%over 2022.As a part of our racial equity commitment,over$450 million was spent in 2023 with more than 190 Black-,Hispanic-and Latino-owned bus

230、inesses.Minority depository institutions and commu-nity development financial institutions.To date,we have invested more than$110 million in equity in diverse financial institutions and pro-vided over$260 million in incremental financing to community development financial institutions to support com

231、munities that lack access to tradi-tional financing.JPMorgan Chase also helped these institutions build their capacity so they can provide a greater number of critical services like mortgages and small business loans.Were thoughtfully continuing our diversity,equity and inclusion efforts.Of course,J

232、PMorgan Chase will conform as the laws evolve.We will scour our programs,our words and our actions to make sure they comply.That said,we think all the efforts mentioned above will remain largely unchanged.And,in fact,around the world,cities and communities where we do business applaud these efforts.

233、We also believe our initiatives make us a more inclusive company and lead to more innovation,smarter decisions and better financial results for us and for the economy overall.We are often asked in particular about“equity”and what that word means.To us,it means equal treatment,equal opportunity and e

234、qual access not equal outcomes.There is nothing wrong with acknowledging and trying to bridge social and eco-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 a

235、t our company feels welcome.We want to articulate how we weigh in on social issues and what it means for our customers.Before I comment about culture issues,I have a confession to make:I am a full-throated,red-blooded,patriotic,free-enterprise(properly regu-lated,of course)and free-market capitalist

236、.Our company is frequently asked to take a position on an issue,rule or legislation that might be consid-ered“cultural.”When that happens,we take a deep breath and study the matter.Many of the laws in question have many specific requirements,some of which you would agree with but not oth-ers.But we

237、are being asked to support the entire law.In cases like these,we simply make our own statement that reflects our educated view and val-ues;however,we do not give our voice to others.We believe in the values of democracy,including freedom of speech and expression,and are staunchly against discriminat

238、ion and hate.We have not turned away and will not turn away customers because of their political or religious affiliations nor would we tell customers how they should spend their money.Our commitment to these ideals is also reflected in our employees.The talent at our firm is a vibrant mix of cultur

239、es,beliefs and backgrounds.We are,of course,fully committed to freedom of speech.There are things that you can say that would be permitted under freedom of speech but would not be allowed under our Code of Conduct.For exam-ple,we do not allow intimidation,threats or highly prejudicial behavior or sp

240、eech.Our Code of Con-duct clearly stipulates that certain statements and behavior,while allowed under freedom of speech,can lead to disciplinary action at our company from being reprimanded to being fired.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY25WHAT WE LEARNED:A FIVE-POINT ACTION PLAN TO MOVE

241、FORWARD ON THE CLIMATE CHALLENGE In May 2023,we gathered with knowledgeable and influential people from the energy industry writ large to the government and financial services arena in Scottsdale,Arizona,for an action forum.The goal was to explore various aspects of the climate challenge and try to

242、devise effective solutions that could help lead to meaningful progress.The climate challenge is immense and complex.Addressing it requires more than making simplistic statements and rules;rather,energy systems and global supply chains need to be transformed across virtually all industries.And there

243、is also a deep need for new research and development.Energy systems and supply chains provide the foundation of the global economy and must be treated with care.At the same time,the opportunity here is immense.The investment required to meet climate goals estimated at over$5 trillion annually could

244、generate economywide growth and opportunity at a scale the world has not seen since the Industrial Revolution.The task for industry,policymakers and finance is to help formulate solutions that support the transition to a low-carbon economy,balancing affordable,reliable access to energy with generati

245、ng economic growth.To find a way forward,we sought input from diverse stakeholders in pursuit of a North Star.In Scottsdale and in discussions with clients across industries about whats needed to achieve a low-carbon economy,these five action steps and reforms were top of mind:Supportive government

246、policy and leadership to advance the transition.Policy that promotes favorable economic conditions to make the transition viable is a critical first step for clients.This includes government leadership via mandates,incentives or subsidies to support jobs and investment in the transition;actions on p

247、ermitting and interconnection reform;and regulatory clarity and certainty,especially around long-term investments.As one vital example,current grid infrastructure is insufficient to accommodate the growth in renewables.Public/private partnerships in scaling bankable projects.Scaling investments need

248、s to happen both for commercially proven technologies(e.g.,wind and solar)and for emerging technologies(e.g.,green hydrogen,sustainable aviation fuel and carbon capture).Developing“bankable”clean energy projects will require the application of smart financial tools,as well as further policy support.

249、It will take public/private partnerships and innovation to create catalytic forms of capital that can step into these gaps,absorb first-mover risks and provide the necessary funding.The cost of capital is too high for some companies and public funds ought to be deployed in a smart way that effective

250、ly attracts private capital.Public education and engagement.Without question,clients told us that public commitment to and investment in energy-related infrastructure is one of the most important parts of combating the climate crisis and running their businesses.Supporting the buildout of energy-rel

251、ated infrastructure with speed and scale is critical.Public acceptance of building and advancing the infrastructure needed to meet climate goals is at the heart of progress.While the energy transition is poised to deliver benefits to communities across the world,securing acceptance and support to bu

252、ild clean energy infrastructure at scale is challenging.Access to job-creating renewable energy projects can help rural communities thrive by advancing local economies.Ensuring public support and social license to operate requires better engagement strategies,including widespread stakeholder educati

253、on about the benefits of these technologies for local communities.Communication about concrete successes.Across industries,market participants need to do a better job of celebrating and championing concrete successes and tangible milestones.This includes highlighting success stories around emerging

254、technologies and the complex nature of the carbon transition.Stakeholders also should better convey the benefits of clean energy across all technologies to help combat misinformation and foster a more informed dialogue.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY26 Work skills training.Businesses de

255、pend on healthy,thriving communities so the carbon transition needs to work for everyone.This includes helping to ensure that workers are trained in the skills for the future,such as through improved engineering schools and job training programs.Work across the entire supply chain is essential to mo

256、ving at pace.As one example,the U.S.Bureau of Labor Statistics estimates we will need more than 70,000 additional electricians per year through 2031;it is currently unclear how the market will meet that demand.If the deployment of heat pumps and electric vehicle chargers accelerates,demand for elect

257、ricians will be even higher.A concerted focus to train electricians can help the United States meet some of its climate goals while providing well-paying jobs that do not require a four-year college degree.Also,broadly speaking,businesses are in a better position to make investments with confidence

258、when labor requirements across the value chain from design and manufacturing to installation are satisfied.We recently reconsidered certain memberships.JPMorgan Chase recently exited Climate Action 100+and the Equator Principles.“Why?”we are asked.While we dont necessarily disagree with some of the

259、principles many organizations have,we make our own business decisions.We 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 ou

260、r 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.We are engaged but recognize our role:three more important points.First,everyone should understand that conquering the climate problem needs prope

261、r government action,particularly around taxes,permitting,grids,infrastructure building and proper coordination of policies we are not there yet.Second,there is no known technology that can fill the gap between our“aspirations”and the current trajectory of the world.We hope and believe that this will

262、 be found(for example,through carbon capture,improved batteries,hydrogen or other measures).This new technology will also require proper government research and development funding,as the effort cannot be accomplished by private enterprise alone.And third,we are going to use the word“commitment”much

263、 more reservedly in the future,clearly differentiating between aspirations we are actively striving toward and binding commitments.For JPMorgan Chase to play the right role in tackling the climate challenge,we have organized a special group around the green economy and related infrastructure investm

264、ent.This group will coordinate and inform our work across all established industry groups(from auto to real estate,energy,agriculture and others)and includes hundreds of employees devoted to these efforts.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY27POWERING ECONOMIC GROWTH IN FLORIDA From Tallahas

265、see to Miami and from Tampa to Palm Bay,JPMorgan Chase has been committed to Florida for more than 130 years and has enjoyed being the bank for all communities.Each year,we contribute billions of dollars to the economy,hire and train local residents,help to revitalize neighborhoods and remove barrie

266、rs to opportunity for Floridians across the state.Our partnerships with businesses,nonprofits,government entities and community organizations have enabled us to drive sustainable impact and help them achieve their goals.We couldnt be more proud to help make opportunity happen in Florida.This year,we

267、 forged a relationship with Inter Miami CF,one of the most recognizable sports teams in the world.Through this partnership and the newly named Chase Stadium,were continuing to contribute to South Florida and its local communities.In Tampa,home to nearly 6,000 of our employees,were triggering an addi

268、tional$210 million in economic activity and creating over 660 local construction jobs through the renovation of our Highland Oaks campus and downtown Tampa office.Were proud that one-third of all Floridians do business with us through deposits,credit cards or a mortgage.Through each of our investmen

269、ts across the state,were ensuring that residents have the resources and tools they need to thrive.Our support to government,higher education,healthcare and nonprofit organizations:We serve over 150 government,higher education,healthcare and nonprofit clients throughout the state,and over the last fi

270、ve years,we have provided more than$20.2 billion in credit and capital to them.Our clients range from the city of Jacksonville to the Orlando Utilities Commission,the University of South Florida,Broward Health and the District School Board of Pasco County a decades-long client.We are the lead treasu

271、ry bank for the Wounded Warrior Project,one of the largest veteran service organizations in the United States.Headquartered in Jacksonville,the organization caters to wounded veterans and service members who served in the military on or after 9/11.Our support to investment and middle-market banking

272、clients:Over the last five years,we have provided in excess of$318 billion in credit and capital to local clients,such as utility,technology and tourism companies.We have more than 12,500 large and midsized clients across the state.Our support to local financial firms:Over the last five years,we hav

273、e 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 Floridas regional,midsized and community banks,helping them play an essential role in maintaining the states economy and ser

274、ve local communities.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY28Our support to small business:At the end of 2023,balances for loans extended to Floridas small businesses totaled more than$1.2 billion funds being used to help those businesses scale and grow,contribute to the economy and create loc

275、al jobs.Across the state,we have over 654,000 small business customers.In 2023,our bankers and senior business consultants spent more than 375,000 hours advising and supporting Florida business owners.Our support to consumer banking needs:We operate 1,445 ATMs and 410 branches across the state.In 20

276、23,we supported more than 6.1 million customers with mortgages,auto loans and savings,checking and credit card accounts,giving JPMorgan Chase one of the largest consumer banking market shares in the state.We managed more than$70 billion in investment and annuity assets for local clients.Our business

277、 and community investments:Over the last five years,we have committed nearly$65 million in philanthropic support,including:$3 million to The Miami Foundations Resilient 305:Building Prosperity Collaborative to increase access to quality jobs and develop small businesses through training,investments

278、and capacity-building.$1.6 million to the Community Justice Project,which empowers community-based legal advocates to help delay displacement and improve conditions for housing stability for renters across nine Florida counties.In 2022,we committed$10 million over five years to Tech Equity Miami to

279、advance equal access to tech skills,careers and education,including:A$1 million investment to Florida Memorial University,South Floridas only HBCU,to help traditionally underresourced students pursue a career in technology.Our support as a local employer:We employ more than 14,000 residents througho

280、ut 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

281、income of nearly$40,300.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY29GIVING THE BANK REGULATORY AND SUPERVISORY PROCESS A SERIOUS REVIEWThe Dodd-Frank Wall Street Reform and Consumer Protection Act(Dodd-Frank)was finished 14 years ago,and we believe it accomplished a lot of good things.But its been

282、 quite a while since then,and were still debating some very basic issues.Its time to take a serious,hard,honest look at what has been done and what can be improved.Its good to remember that the United States has the best financial system in the world,with diversi-fied,deep and experienced institutio

283、ns,from banks,pension plans,hedge funds and private equity to individual investors.It has healthy public and private markets,transparency,rule of law and deep research.The best banking system in the world is a critical part of this,and,integrated with the overall financial system,is foundational to

284、the proper allocation of capital,innovation and the fueling of Americas growth engine.This is not about JPMorgan Chase we believe we can manage through whatever is thrown our way.This is about the impact on all parts of the system from smaller banks to larger regional banks that may not have the res

285、ources to handle all of these regulatory requirements.Its also about the effect on the financial markets and the economy from the rapidly growing shadow banking system,as well as the ultimate impact on the customers,clients and communities we serve.This is about whats right for the system.The bankin

286、g and financial system is innovative,dynamic and constantly changing.The banking system is not static:There are startup banks,mergers,successful upstarts and fintech banks,and even Apple,which effectively acts as a bank it holds money,moves money,lends money and so on.Nonbanks are competing with tra

287、di-tional banks,and,in general,this dynamism and churn are good for innovation and invention with success and failure simply part of the robust pro-cess.Innovation runs across payments systems,budgeting,digital access,product extensions,risk and fraud prevention,and other services.Different institut

288、ions play different roles,and,importantly,small banks and big banks serve completely differ-ent strategic functions.Large banks bank multina-tional corporations around the world,make healthy markets,and wield technology and a prod-uct set that are the best in the world.A small bank simply cannot ban

289、k these same multinational gov-ernments and safely move the amount of money and securities that large banks do.Regional and community banks have exceptional local knowl-edge and presence and are critical in serving thousands of towns and certain geographies.It is also important to recognize that the

290、 banking system as we know it is shrinking relative to pri-vate markets and fintech,which are growing and becoming increasingly competitive.And remember that many of these new players do not have the same transparency or need to abide by the exten-sive rules and regulations as traditional banks,even

291、 if they offer similar products this often gives them significant advantage.To deal with this fluid environment,banks of all sizes develop their own strategies,whether to specialize,expand geographically or embark on mergers and acquisitions.There are certain banking services where economies of scal

292、e are a competitive advantage,but not all banks need to become bigger to gain this benefit(there are many highly success-ful banks that are smaller).What is clear is that banks should be allowed to pursue their individual strategies,including mergers and acquisitions,as they see fit.Overall,this pro

293、cess should be allowed to happen its part of the natural and healthy course of capitalism and it can be done without harming the American taxpayer or economy.While we all want a strong banking and financial system,we should step back and assess how all the regulatory steps we have taken measure up a

294、gainst the goals we all share.Since Dodd-Frank was signed into law in 2010,thousands of rules and reporting requirements written by 10+different regulatory bodies in the United States alone have been added.And it would probably be an understatement to say that some are duplicative,inconsistent,procy

295、clical,contradictory,extremely costly,and unnecessarily painful for both banks and regulators.Many of the rules have unintended consequences that are not desirable and have negative impacts,such as increasing the cost of credit for consumers(hurting lower-income Americans the most).UPDATE ON SPECIFI

296、C ISSUES FACING OUR COMPANY30The whole process,including the Basel III endgame,could be much more productive,streamlined,economical,efficient and safe.Both regulators and banks should want the same thing a healthy banking system,serving its cli-ents and striving for continuous improvement.We all sho

297、uld also want the enormous benefits that would come from good collaboration between reg-ulators and bank management teams and boards.Over time,these relationships have deteriorated,and,again,are increasingly less constructive.There is little real collaboration between practi-tioners the banks and re

298、gulators,who gener-ally have not been practitioners in business.While we acknowledge the dedication of regulators who work with banks on a daily basis,management teams across the industry are putting in a disproportionate amount of time addressing requests for extra details,documentation and process

299、es that extend far beyond the actual rules and distract both regulators and management from more critical work.We should be more focused on the truly important risks for the safety of the system.And unfortunately,without collabo-ration and sufficient analysis,it is hard to be confi-dent that regulat

300、ion will accomplish desired out-comes without undesirable consequences.Instead of constantly improving the system,we may be making it worse.A few additional points:The Basel III endgame disadvantages American banks.The Basel III endgame has been 10 years in the making,and it still has not been compl

301、eted.In my view,many of the rules are flawed and poorly calibrated.If the Basel III endgame were implemented in its current form,it would hamper American banks:As proposed,it would increase our firms required capital by 25%,making our requirement 30%higher than it would be under the equivalent Europ

302、ean Union proposal.That means for every loan and asset financed in the United States by a major American bank,that bank would have to hold 30%more capital than any international com-petitor.The proposed regulations would also damage market making(see the following sec-tion).There are many other flaw

303、s but suffice it to say that much of the work being done today to analyze the effects should have been done before the proposed rulemaking.One of the single most important lessons from the great financial crisis is that there is enormous value to having a bank that is well-managed and has diverse re

304、venue sources.Yet regulation since then both punishes consolidation and diversification and punishes performance through many features of the GSIB surcharge.Built over many years,the framework is now full of duplication.The following is only a par-tial list:American gold-plating and conceptual incon

305、sistencies among Comprehensive Capital Analysis and Review(CCAR),recovery and reso-lution plans,liquidity requirements,global sys-temically important bank(GSIB)requirements,and safety and soundness principles.The many overlapping rules contribute to the bureaucracy that generates an extraordinary am

306、ount of make-work(an 80,000-page CCAR and shock-ingly another,coincidentally,80,000-page recovery and resolution plan).The new rules do virtually nothing to fix what caused the failure of SVB and First Republic.For example,they dont improve certain liquidity requirements,limit HTM accounting or redu

307、ce allowable interest rate exposure.The current regulatory approach to liquidity might simply run counter to the stated intent.Regulations should recognize the value and importance of lending and borrowing against good collateral and using central bank resources,such as the discount window.Adhering

308、to current liquidity requirements per-manently ties up good liquidity in a way that makes the system more fragile and more risky.It is not clear what the full intent of the Basel III endgame was it will have unintended con-sequences.Without real analysis of expected outcomes,additional regulation wi

309、ll likely reduce the number of banks offering certain services and increase costs for all market partic-ipants and activity,including loans,market making and hedging(by farmers,airlines and countries,among others).And new rules might even increase consolidation as companies race to achieve economies

310、 of scale in certain prod-ucts and services.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY31Unfortunately,some recent regulations are ending up in court.You can imagine that no one wants to sue their regulators.Banks would not sue if they did not think they were right or if they thought they had any o

311、ther recourse which they effectively do not.This is definitely not what anyone should want.A more constructive relationship with regulators would reduce confusion and uncertainty and would lead to better outcomes for banks,their sharehold-ers,and their clients,customers and communities.Collaboration

312、 between banks and regulators could improve the use of resources and create better outcomes.True collaboration could dramatically improve the banking system.For example:Redirect enormous resources from things that dont matter to things that do.As mentioned,it takes 80,000 pages to describe a CCAR te

313、st and 80,000 pages to detail recovery and resolution.The talent and resources at the banks and regulators could be better used elsewhere.Such overload is distracting and takes your eye off the ball on real,emerging risks,including China,trade,payment systems and cybersecu-rity,among others.Reduce b

314、ureaucratic processes that provoke a tendency to herd mentality.For example,CCAR is just a point-in-time stress test,and it can lull you into a false sense of security for refer-ence,we do more than 100 stress tests each week.On interest rate exposure,focusing on the documentation of details may sto

315、p you from thinking about big interest rate exposure.Sometimes analyzing“what ifs”and fat tail risks is better than excessive and rigid models and documentations.Examine risks outside the regulatory system that are rarely analyzed and largely unad-dressed.These risks include data and privacy,as well

316、 as consumer banking and payment sys-tems,which are growing fast in the unregulated market.In addition,there are potential risks from private credit markets(which I talk about later in the next section).Lets imagine whats possible with real collabo-ration.Working together,we can improve how the FDIC

317、 manages failing institutions,how to limit contagion and restore confidence to depositors,how liquidity requirements can create more flexi-ble funding for banks under stress,how the bank-ing and Federal Reserves payment system can become more interoperable,how clearinghouse risk can be reduced,how s

318、tress tests can protect the system from a wider variety of outcomes,how costs and therefore consumer costs can be reduced(not increased),how anti-money laun-dering requirements can be simplified and improved at the same time,and how financial products can be brought to the unbanked.We can fix the ho

319、using and mortgage markets.For example,mortgage regulations around orig-ination,servicing and securitization could be simplified,without increasing risk,in a way that would reduce the average mortgage by 70 or 80 basis points.The Urban Institute estimates that a reduction like this would increase mo

320、rtgage originations by 1 million per year and help lower-income households,in particular,buy their first home,thereby starting them on the best way to build household net worth.There are many more things that can be improved and we really should start working on them.We need a detailed review and pr

321、obably a complete revamp.I know this might be wishful thinking,but now would be a good time to step back and have a thor-ough and candid review of the thousands of new rules passed since Dodd-Frank.After this review,we should ask what is it that we really want:Do we want to try to eliminate the poss

322、ibility of bank runs?Do we want to change and create liquidity rules that would essentially back most uninsured deposits?Do we want the mortgage business and leveraged lend-ing business to be inside or outside the banking sys-tem?Do we want products that are inside and out-side the banking system to

323、 be regulated the same way?Do we want to reasonably give smaller banks a leg up in purchasing a failing bank?And while Dodd-Frank did some good things,shouldnt we take a look at the huge overlapping jurisdictions of various regulators?This overlap creates difficulties,not only for banks,but for the

324、regulators,too.Any and all of this is achievable,and,I believe,could be accom-plished with simpler rules and guidelines and with-out stifling our critical banking system.UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY32PROTECTING THE ESSENTIAL ROLE OF MARKET MAKING(TRADING)Before we discuss market maki

325、ng and financial markets,readers should understand that market making occurs in almost all businesses.There are healthy markets in farm animals,foreign prod-ucts,commodities,energy,logistics,healthcare and so on.Healthy markets increase customer choice and reduce cost.They almost always involve hold

326、ing inventory and taking some risk,which is simply a part of the process.Americas financial markets are the biggest in the world U.S.public debt and equity markets total$137 trillion,constituting the biggest“market”in the world,and are larger than Americas gross domestic product(GDP)of$27 trillion.M

327、arket participants are not“Wall Street.”They are large and small,mainly sophisticated,global inves-tors(pension plans,mutual funds,governments and individuals)representing retirees,veterans,individuals,unions,federal workers and others.They all benefit from our efficient,low-cost and transparent mar

328、kets.Some regulators seem to think that market making is a speculative,hedge fund-like activity and this thinking is what might be leading them to con-stantly increase capital requirements.The pro-posed capital rules could fundamentally alter market-making activities that are critical to a thriving

329、economy,particularly in difficult markets when market making is even more important.The new rules would raise capital requirements by 50%for major banks which could undermine market stability,make banking services costlier and less accessible,and push even more activity to a less regulated banking s

330、ystem.Our financial system and markets are the best in the world and benefit ALL participants;exceptionally good market making in the secondary market makes our primary markets the best in the world.We should recognize that the United States has the biggest,deepest and most liquid capital markets in

331、 the world.For these markets to function,it is critical for transparency and liquidity to be in the secondary market.Market making provides this,promoting the flow of capital to real economy investments and supporting all sectors of the economy,including companies,state and local governments,univers

332、ities,hospitals,pension plans and overall job creation.Without market making in the secondary market,it would be extremely diffi-cult for companies to raise capital through the primary market equity and debt offerings which have totaled approximately$3.6 trillion on average over the past few years.T

333、he incredible strength of these markets enables companies of all sizes to grow and expand especially during times of volatility and stress.It also enables consumers to access cheaper credit and governments(local,state and federal)to reduce their borrowing costs.It takes enormous resources to properly support the Markets business.JPMorgan Chase spends$700 million per year in extensive research cove