JP Morgan Chase 2015 Annual Report Download - page 16

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Do you think you now have “fortress controls” in place?
We are good and are getting better. The
intense eorts over the last few years across
our operating businesses – Risk, Finance,
Compliance, Legal and Audit – are now
yielding real results that will protect the
company in the future. We have reinforced
a culture of accountability for assuming risk
and have come a long way in self-identifying
and fixing shortcomings. Many new perma-
nent organizational structures have been
put in place to ensure constant review and
continuous improvement. For example,
we now have a permanent Oversight &
Control Group. The group is charged with
enhancing the firm’s control environment
by looking within and across the lines of
business and corporate functions to identify
and remediate control issues. This func-
tion enables us to detect control problems
more quickly, escalate issues promptly and
engage other stakeholders to understand
However, we are going to be extremely vigi-
lant to do more de-risking if we believe that
something creates additional legal, regulatory
or political risks. We regularly review all our
business activities and try to exceed – not
just meet – regulatory demands. We also now
ask our Legal Department to be on the search
for “emerging legal risks.” We try to think
dierently; for example, we try to look at
legal risks not based on how the law is today
but based on how the law might be inter-
preted dierently 10 years from now. It is
perfectly reasonable for the legal and regula-
Have you completed your major de-risking initiatives?
Yes, we have completed our major de-risking
initiatives, and some were pretty draconian.
In the chart below, I show just a few of the
actions that we were willing to take to reduce
various forms of risk:
tory agencies to want to improve the quality
of the businesses they oversee, particularly
around important issues such as customer
protection. We also expect this refinement
frequently will be achieved through enforce-
ment actions as opposed to the adoption of
new rules that raise standards. For many
years, regulations generally were viewed as
being static. As we do everywhere else, we
should be striving for constant improvement
to stay ahead of the curve.
Executed Significant Business Simplification Agenda
Business simplification initiatives Other meaningful business actions
ü
Exited Private Equity business
ü
Exited Physical Commodities business
ü
Exited Special Mezzanine Financing business
ü
Exited majority of Broker-Dealer Services business
ü 
Exited International Commercial Card
ü 
Sold Retirement Plan Services unit1
ü 
Exited government prepaid card
ü Simplified Mortgage Banking products from 37
to 15 products
ü
Ceased originating student loans
ü  De-risking by discontinuing certain businesses
with high-risk clients in high-risk geographies:
—
Business Banking closed ~9,000 clients
— Commercial Banking closed ~4,600 clients
— Private Banking closed ~1,700 clients
— Consumer Banking closed ~140,000 clients
— CIB closed ~2,900 clients
 
(Includes restricted/exited transaction services
for ~500 Foreign Correspondent Banking clients)
1 401(k) administration business