JP Morgan Chase 2015 Annual Report Download - page 43

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Our size and our diversification make us stronger.
Our large and diversified earnings streams
and good margins create a strong base of
earnings that can withstand many dierent
crises. Stock analysts have pointed out that
JPMorgan Chase has among the lowest
earnings volatility and revenue volatility
among all banks. This strength is what
allows us to invest in countries to support
our clients and to have the staying power to
survive tough times. We are a port of safety
in almost any storm.
Finally, our size gives us the ability to make
large and innovative investments that are
often needed to create new products and
services or to improve our eciency. The
ultimate beneficiary of all this is our clients.
Community banks are critical to the country —
large banks provide essential services to them.
(I prepared this section initially as an op-ed
article, but I’d like you to see it in total.)
Not long ago, I read some commentary
excoriating big banks written by the CEO
of a regional bank. The grievances weren’t
new or surprising – in the current climate,
one doesn’t have to look far to find someone
attacking large financial institutions. But I
recognized this particular bank as a client
of ours. So I did some digging. It turns out
that our firms have a relationship that goes
back many years and spans a broad range of
services. And it struck me how powerful the
incentive is, in today’s heated public dialogue,
to frame issues as a winner-take-all fight
between opposing interests: big vs. small.
Main Street vs. Wall Street. It is a simple
narrative, and while banks of all sizes make
mistakes, certainly a key lesson of the crisis
is that mistakes at the largest institutions can
impact the broader financial system.
But, as is often the case, reality tells a deeper
story, and the U.S. financial services industry
does not conform to simple narratives. It is a
complex ecosystem that depends on diverse
business models co-existing because there
is no other way to eectively serve Ameri-
ca’s vast array of customers and clients. A
healthy banking system depends on institu-
tions of all sizes to drive innovation, build
and support our financial infrastructure, and
provide the essential services that support
the U.S. economy and allow it to thrive.
In our system, smaller regional and commu-
nity banks play an indispensable role. These
institutions sit close to the communities
they serve. Their highest-ranking corporate
ocers live in the same neighborhoods as
their clients. They are able to forge deep and
long-standing relationships and bring a keen
knowledge of the local economy and culture.
They frequently are able to provide high-
touch and specialized banking services, given
their unique connection to their communities.
Total Bank Assets as a % of GDP
by Country1
Top 5 Bank Assets as a % of Total Bank Assets
by Country1
1 Approximate percentages based on 2014 data.
2 Excludes the estimated impact of certain derivatives netting.
United
Kingdom
FranceChinaJapanCanadaGermanyUnited
States2
120%
220% 220% 220%
250%
350% 350%
CFr e
K gdom
2
yC
45%
50%
55%
70%
75%
80%
90%