Dimon on bailouts, cybersecurity, social media's crisis
JPMorgan Chase Chairman and CEO Jamie Dimon downplayed the risk of "too big to fail" and warned about newer threats like a major cyberattack on the financial system during a discussion of economic policy and corporate leadership Tuesday.
In an appearance at the American Enterprise Institute, a conservative think tank in Washington, Dimon was asked whether, ten years after the nation’s banks were bailed out by the federal government if the era of "too big to fail" had come to an end.
Dimon pointed to work that has been done in the industry on resolution planning, which forces banks to provide a detailed plan of how they could be dismantled without government help if they begin to fail. He also noted that, when banks fail today, the industry is on the hook for the cost of the resolution through the assessments banks pay to the Federal Deposit Insurance Corp.
Still, he said, there are risks in the financial system, including the potential for a serious cyberattack.
“I think ["too big to fail" is] mostly over, but you should always be on the lookout for things that cause problems in the system,” Dimon said. "Cyber might be one of them."
His comments come as big banks have seen an increase in attempted cyberattacks. According to a report Monday in The Wall Street Journal, federal officials have asked big banks — including JPMorgan, Bank of America and Wells Fargo — to closely monitor activity by criminals attempting to find weaknesses in their computer networks.
During the event Tuesday, Dimon was also asked about changes he wants to see to anti-money-laundering rules.
“The cost is enormous,” he said, referring to the expense of keeping up with know-your-customer and other anti-laundering requirements. “And then we torture the clients.”
Dimon said JPMorgan files roughly 200,000 suspicious activity reports per year, adding that, under current rules, banks are not allowed to share the information with each other.
Dimon said policymakers are looking for ways to simplify the compliance burden on companies. He noted that in other parts of the world, the burden of doing due diligence on shell companies, for instance, is eased by simply requiring more information from the owners upfront.
“In some countries, when you file a corporation, you have to state the ownership,” Dimon said. "Period. You’re done.”
Additionally, Dimon had tough words for the social media companies in Silicon Valley on the issue of data privacy.
Facebook, of course, has come under regulatory scrutiny following revelations that Cambridge Analytica, a firm with ties to President Trump’s 2016 campaign, improperly accessed data on as many as 87 million customers. Other platforms, such as Twitter, have been criticized for their role in spreading misinformation.
“If I was them, I would realize I have a real problem, and they are in inning two,” said Dimon, noting that the American public “would be outraged” if they knew the truth about their online privacy.
“When it starts, man, they all come at the same time,” Dimon said.
Facebook, notably, has recently asked banks to share financial information about their customers, in an effort to offer new services, but data privacy has been a sticking point in those discussions, according to The Wall Street Journal.