JPMorgan Chase CEO: I am optimistic for Greece

JPMorgan Chase CEO: I am optimistic for Greece

Jamie Dimon is board chairman and chief executive officer of the world’s largest systemic bank, JPMorgan Chase, he often meets with heads of state and his opinion is of great importance to global markets. In this interview with Kathimerini he speaks of his pride in his Greek roots and talks about the tribute he intends to pay to his parents and grandparents during a formal dinner while visiting the country.

The Greek-American banker is optimistic about Greece as “it has a rational government that makes rational decisions” and he finds it amazing that Greece has its first startup with a value of over $1 billion. Referring to Athens-based payments fintech Viva Wallet, in which JPMorgan has agreed to buy a 49% stake, he adds that Greece has talented and educated people who could create other such companies.

The discussion also touches on the major issues our world is facing today, with Dimon offering his thoughts on the crucial questions of whether the energy and commodity price spike will continue, whether there will be a dramatic correction on Wall Street, and whether cryptocurrencies are a safe investment or merely a bubble.

I remember two and a half years ago, you started being a bit optimistic about Greece? How do you feel now? 

I am optimistic because you have a rational government making rational decisions. The EU money helps. I think the EU did it the right way, they have set milestones to be accomplished in order to give the money – they don’t just hand it out. I’m optimistic, you’ve had a nice 2021.

How and why did you decide to acquire a stake in Viva Wallet?

We already have one of the largest retail service networks in the world. Viva has done an amazing job in 23 countries. They have managed to serve stores or groups in different countries with different systems. While we are doing a good job, they have created systems that we still don’t have.

Were you surprised to learn that they are a Greek company?

Oh yes. Takis came to me and said: “You won’t believe it Jamie. We’re looking at a Greek company.” I think it’s fabulous for Greece. It’s a great company, a unicorn [a company that has been valued at more than $1 billion].

I understand you have further plans for Greece.

Yes, we will create a “hub.” You see, this is something that changed with Covid: Any country that has talented, educated, creative people can build businesses that don’t have to be in the US. It can be far away – here let’s say. That’s something every country needs to keep in mind.

Do you see the potential for more investment here?

I hope so.

How important is your Greek heritage to you?

It has always been very important to me. My mother came from a village outside Sparta. I visited it a few years ago – my parents died five years ago. I had the chance to go with them to our village, Agios Petros.

On Thursday night we are having a dinner and I really want to make a toast to my parents, my grandparents, my ancestors. I still remember when I got my first big job, I went to my grandfather and said, “Pappou, you should be proud that the grandson of a Greek immigrant has made it this far.” I still remember his smile and his emotion.

There is a lot of talk about a big correction in the US stock market. Do you see it coming?

Well, let’s talk about the economy versus the market. People are confusing the two. We have a rather strong economy. Consumers are spending 20% more than they were spending before Covid because of all the stimulus. They have a lot more money in their accounts. They can continue to spend at very high levels. Businesses are in great shape. So are consumers. They paid off debt, their home prices are up, as are their assets. The economy is doing well in spite of Omicron, in spite of supply chains. So things are getting better. There is of course inflation, which I personally never really thought was transitory. It may very well come down. Maybe it will drop at some point from 6% to 4% or 3%. Hopefully the Fed will make the right actions and not stop a fairly strong economy.

The stock market needs a strong economy to justify its prices. Ιt is overvalued. There are sectors that are overvalued, sectors that are going to respond dramatically to higher interest rates, sectors that may be worth more than they are today. And that’s why there’s a lot of volatility; you see it now every day in the marketplace. The same thing is happening in the bond market.

So you’re seeing some correction, but not a dramatic one?

The market will follow the economy. If the economy has a couple of good years, inflation doesn’t go away but is contained, the market will do OK. But no one should be surprised by speculation when there is such monetary and fiscal stimulus. With this kind of stimulus, money goes directly from people’s checking accounts into speculative vehicles. People speculate, we should not be surprised by this.

So, does inflation worry you?

It will continue for a while. In some areas, like used car-related supply chain sectors, it will be temporary. Housing will go up, energy costs will go up. Wages will go up. That’s not a complaint – they should go up – but they will go up for quite some time. But we are preparing for all possibilities.

Just a few years ago no one was talking about political instability in the US. But now that’s becoming a factor, is it a concern for you?

Yes, it’s not good for the world that people talk about political instability in the US. There is concern after January 6, 2021 and ahead of the Congressional elections. I hope this fades by 2024. We now hear people attack the way state legislators vote etc. It’s very bad, and extremely unpatriotic on the part of those who are undermining the American system.

Here in Greece, and in general, there is a lot of talk about the rising cost of many commodities and energy. Is it going to continue this way?

This is almost guaranteed to continue, unfortunately. It has to do with climate change, which is a real problem. It’s an issue that we need to focus on, with very detailed industrial policy and research. There is a slowdown on oil and gas projects funding. The only way to have a smooth transition and drastically reduce CO2 is to replace coal with gas. There is no other way. If we get this wrong we will see the price of oil go up dramatically. We’re going to get to $120 a barrel. With the growth we have, the need for oil will increase and I’m not sure that in six to nine months there will be enough to meet demand. And all of this will be terrible for low-income people around the world and will cause political disruption.

Is there a solution to this problem?

Without a doubt there should be a tax on carbon. But the issue is that it will be borne disproportionally by lower income groups. In Ireland they have such a tax but they give some of it back to people through education for people on low incomes, through housing provision and gas subsidies. That is what world leaders need to do, to tackle the problem in a way that we can have both growth and carbon reduction.

The challenge is huge… Let me give you an example: I met recently with the head of an energy utility, one of the world’s largest in wind power. He was telling me that its costs are going to go way up. Governments want to charge for the use of the seabed. In the US it takes two years to build them, in other countries 15-20 years, because of the rules and regulations involved. So the cost of capital and the risk of building will lead to a situation where wind power will be four to five times more expensive and four to five times slower to make investments. Is that how we are going to solve the problems? We are on the verge of a very unpleasant surprise.

Are cryptocurrencies a bubble?

I don’t call them cryptocurrencies, I call them crypto-tokens, because currencies have rules of law behind them, central banks and tax authorities. While the valuation is there, personally I don’t understand them and I think people need to be careful and more control is needed by states. You’ve seen that in the last couple of months they have lost half their value in the US market.

But don’t you have your own cryptocurrency?

I would separate those backed by the dollar. We have a JP Morgan coin, with which you can get cash from us or someone else. It represents dollar at our bank.

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