JP Morgan boss: US should take stronger stance over Russia


The JP Morgan chief executive, Jamie Dimon, has warned that the US bank could lose up to $1bn (£763m) from its exposure to Russia, as he called on the US government to deploy more troops, restructure supply chains and launch a new “Marshall plan” to ensure energy supply in response to the war in Ukraine.

In his widely read annual letter to investors, Dimon urged Joe Biden’s administration to take a stronger stance against the “grave new geopolitical realities” emerging after Russia’s invasion of Ukraine, saying it was up to democratic nations to take a stand “against all forms of evil”.

Dimon, who is one of the most high-profile bosses to comment on the conflict so far, also detailed the bank’s potential $1bn losses because of its direct exposure to Russia. JP Morgan announced it was winding down its Russia operations – which employ about 160 staff – last month.

“As I write this letter, the war in Ukraine has been raging for well over a month and is creating a significant refugee crisis. We do not know what its outcome ultimately will be, but the hostilities in Ukraine and the sanctions on Russia are already having a substantial economic impact. They have roiled global oil, commodity and agricultural markets,” he said.

However, Dimon said the war’s wider impact, including the “potential restructuring of the global order – is far more important”.

Noting that the war could impact geopolitics for decades, he added: “We must confront the Russia challenge with bold solutions.”

Dimon urged the US to develop a Marshall plan that would reduce the west’s reliance on Russian fossil fuels – referring to Harry Truman’s 1948 aid programme that helped western Europe recover from the second world war. “Our European allies, who are highly dependent on Russian energy, require our help,” he said.

“As we are seeing – and know from past experience – oil and gas supply can be easily disrupted, either physically or by additional sanctions, significantly impacting energy prices. National security demands energy security for ourselves and for our allies overseas,” he said.

Tensions are already escalating over the demand by the Russian president, Vladimir Putin, that, from 1 April, all gas bought by foreign countries must be paid for in roubles. G7 countries have so far rejected Moscow’s request.

The banking chief added that the US response should also involve a larger US military budget and deploying more troops to Nato’s borders “as appropriate”, adding that the US government should pledge billions of dollars to rebuild Ukraine and support migrants in Europe.

“America must be ready for the possibility of an extended war in Ukraine with unpredictable outcomes. We should prepare for the worst and hope for the best. We must look at this as a wake-up call,” the letter urged.

“We need to make this a permanent, long-lasting stand for democratic ideals and against all forms of evil.”

Dimon also urged Biden’s administration to “turn up sanctions”, but acknowledged the move would have economic repercussions beyond Russia’s borders. “Along with the unpredictability of war itself and the uncertainty surrounding global commodity supply chains, this makes for a potentially explosive situation,” Dimon added.

JP Morgan’s analysts already predict that the euro area’s GDP will grow by roughly 2% in 2022, instead of the 4.5% expected before the invasion of Ukraine. Meanwhile, the US is only expected to experience GDP growth of 2.5% compared with previous estimates of 3% for 2022.

He added that the US should restructure its supply chains and make sure it no longer relied on countries with “different strategic interests” to provide materials deemed crucial for national security, like rare earths or semiconductors. Instead, the US should only rely on domestic firms or “completely friendly allies” for key goods and services.

“We cannot and should not ever be reliant on processes that can and will be used against us, especially when we are most vulnerable,” Dimon said.