Jamie Dimon, CEO of JPMorgan Chase, is among the most powerful names in the banking industry. How did he come to acquire banks like First Republic Bank, Bear Stearns and Washington Mutual?

WSJ explains how Dimon’s risk management strategy, including his ‘fortress balance sheet,’ propelled him to the top of the largest U.S. bank, and how he has used that role to become the go-to voice for the banking world.

0:00 Dimon’s bank owns roughly 13% of the nation’s deposits
0:38 Dimon’s history and banking strategy
2:06 JPMorgan Chase’s size
4:44 Dimon’s influence on the banking industry
6:20 Dimon’s future

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These were the CEOs of today's 5 biggest banks in the U.S.

This is that group in 2011, in 2016, and in 2021.

This man, JPMorgan Chase CEO Jamie Dimon.

He is the bank, the bank is him in some ways.

Over his tenure, Dimon has become the go-to voice for banks.

We're the best banking system in the world.

Here's how Dimon's strategy for managing risk has made him the most powerful player in the industry and how he's used that position to steer the entire banking world.

Dimon built his reputation over a career that stretches back decades.

He has shaped how the big banks think about what is safe and what isn't safe.

You can look around and see that his lieutenants and former executives run a whole bunch of other banks and they all were schooled at how to run a bank by Jamie Dimon.

need to take risks to make money but you also need to understand the risk and manage the risk.

The center of Diamond's risk management strategy is a concept he calls the Fortress Balance Sheet.

I always thought you should have a Fortress Balance Sheet in this business and maybe some of yours, because bad things happen.

The idea is to build up a cushion of assets and capital to protect consumers' deposits if the bank gets hit by unexpected shockwaves.

And most banks will build the moat and build up their walls and say, we're protected.

But what Jamie Dimon says is, OK, but those walls might be made of like paper mache.

So on top of that wall that all the other banks have, we're gonna add a higher wall, and then we're gonna add some turrets up here, and then we're gonna add some people walking around all the time, making sure that everything is safe all the way down.

Is it fair to say that JPMorgan could have losses of a Half a trillion dollars or a trillion dollars?

He doesn't care about this quarter's results.

He doesn't care about next year's results.

He cares about making sure the bank is safe.

Partly, he gets to say that because he still makes a ton of money on everything he does.

That strategy helped JPMorgan Chase and Dimon emerge from the 2008 financial crisis relatively unscathed and even in a position to assist the government.

We were called upon to take action to help stabilize the system.

In the aftermath, the bank put up big bids to acquire 2 failing financial institutions from the government, Bear Stearns and Washington Mutual.

So he made some smart acquisitions that were beneficial to him and beneficial to the government.

At the time, Sheila Baer was the head of the FDIC.

She orchestrated bids for Washington Mutual, the largest bank to fail in U.S.

We were having a hard time getting bidders in.

A lot of banks just didn't want to touch it.

So he did not withstand the fact we were running a competitive process.

He still came in and bid, thank goodness.

And as I suspected he would, he did win the bid by a pretty, pretty large margin.

Even with debts incurred and lawsuits following from those purchases, The moves helped Chase grow to be the largest bank by deposits by 2011.

He's going to look at something like Washington Mutual and say it's going to give us more deposits and more customers.

The government's supposed to share the losses.

You know, WAMU put us into California, where we really were in Florida.

Morgan grew even larger in May after it bought First Republic Bank, the second largest bank to fail in US history.

But this also raised concern that the bank was too big to fail, meaning that if it were to collapse, it would have a devastating impact on the economy.

I don't know what that word means anymore.

JPMorgan Chase does benefit from the perception of being too big to fail.

They think they're very well run and they are a great bank.

Nobody thinks, even if JPMorgan Chase got into trouble, nobody thinks it would ever be closed.

But Diamond has made missteps in the past.

In 2012, the bank lost more than $6 billion after an employee made a series of risky bets.

This transaction that you said morphed, what did it morph into, Russian roulette?

It morphed into something I can't justify.

He does impose accountability in the context of risk.

be 1 of your best risk management tools is to make sure,

and take some risk, make some money, understand the risk, manage the risk, stay within our risk appetite and understand, you know, if you take stupid risk, you're going to be accountable.

I said, I always don't put me on the pedestal.

Companies make mistakes and CEOs make mistakes.

While Diamond's management style has helped the bank grow even larger than its competitors.

It's also expanded his role in the industry.

If you're the Treasury secretary and there's something broken in the banking industry, Jamie Diamond's your first call.

Treasury Secretary Janet Yellen called Diamond to kickstart First Republic's initial rescue effort.

It did seem to help the crisis and really other CEOs and other banks have been like it was it was Jamie.

And over the years, Diamond has become the go-to voice for banks in Washington.

Members of the committee, I appreciate the opportunity to talk about JPMorgan Chase, the role of America's largest banks as a force for good for the country, its citizens, and the global economy.

When they all go to testify pretty much every year in front of Congress, the other CEOs are like, let's let Jamie answer the questions.

And part of that's because he's built this reputation and he's less worried about losing his job or getting regulators mad at him.

I think it would put smaller banks in a position that when a crisis hits, they will virtually have to stop lending because putting up those reserves would be too much at precisely the wrong time.

So I do think it becomes an issue for you all to reconsider.

And Diamond is known to be outspoken in public statements too.

It's almost an embarrassment being an American citizen traveling around the world and listening to the stupid s*** we have to deal with in this country.

You ask me, I'll tell you my opinion is that's not a JPMorgan opinion and stuff like that.

He is the same person privately and publicly.

Like, he'll curse, he'll get excited about things, he'll dismiss other things.

A spokesperson for JPMorgan Chase and Jamie Dimon declined to comment for this video.

After nearly 2 decades atop JPMorgan Chase, There have been questions about who could fill his shoes when he decides to move on.

He truly has no hobbies, from what I can tell.

Even his friends are like, he doesn't do anything other than run the bank.

But Diamond doesn't plan on going anywhere soon.

A normal person might say it's time to hang up the shoes, but Jamie Dimon is not necessarily a normal person.


Speaker 0: These were the CEOs of today's 5 biggest banks in the U.S. In 2006. This is that group in 2011, in 2016, and in 2021. You'll notice 1 face remained the same. This man, JPMorgan Chase CEO Jamie Dimon.

Speaker 1: He is the bank, the bank is him in some ways.

Speaker 0: Over his tenure, Dimon has become the go-to voice for banks.

Speaker 2: We need healthy big banks. We're the best banking system in the world.

Speaker 0: Here's how Dimon's strategy for managing risk has made him the most powerful player in the industry and how he's used that position to steer the entire banking world. Dimon built his reputation over a career that stretches back decades.

Speaker 1: He has shaped how the big banks think about what is safe and what isn't safe. You can look around and see that his lieutenants and former executives run a whole bunch of other banks and they all were schooled at how to run a bank by Jamie Dimon.

Speaker 3: He's not a reckless banker. I think he understands you

Speaker 4: need to take risks to make money but you also need to understand the risk and manage the risk.

Speaker 0: The center of Diamond's risk management strategy is a concept he calls the Fortress Balance Sheet.

Speaker 2: I always thought you should have a Fortress Balance Sheet in this business and maybe some of yours, because bad things happen.

Speaker 0: The idea is to build up a cushion of assets and capital to protect consumers' deposits if the bank gets hit by unexpected shockwaves.

Speaker 1: And most banks will build the moat and build up their walls and say, we're protected. But what Jamie Dimon says is, OK, but those walls might be made of like paper mache. So on top of that wall that all the other banks have, we're gonna add a higher wall, and then we're gonna add some turrets up here, and then we're gonna add some people walking around all the time, making sure that everything is safe all the way down.

Speaker 5: Is it fair to say that JPMorgan could have losses of a Half a trillion dollars or a trillion dollars?

Speaker 2: Not unless this earth is hit by a moon.

Speaker 1: Okay. He doesn't care about this quarter's results. He doesn't care about next year's results. He cares about making sure the bank is safe. Partly, he gets to say that because he still makes a ton of money on everything he does.

But it's worked.

Speaker 0: That strategy helped JPMorgan Chase and Dimon emerge from the 2008 financial crisis relatively unscathed and even in a position to assist the government.

Speaker 2: We were called upon to take action to help stabilize the system.

Speaker 0: In the aftermath, the bank put up big bids to acquire 2 failing financial institutions from the government, Bear Stearns and Washington Mutual.

Speaker 4: So he made some smart acquisitions that were beneficial to him and beneficial to the government.

Speaker 0: At the time, Sheila Baer was the head of the FDIC. She orchestrated bids for Washington Mutual, the largest bank to fail in U.S. History.

Speaker 3: We were having a hard time getting bidders in. A lot of banks just didn't want to touch it. So he did not withstand the fact we were running a competitive process. He still came in and bid, thank goodness. And as I suspected he would, he did win the bid by a pretty, pretty large margin.

Speaker 0: Even with debts incurred and lawsuits following from those purchases, The moves helped Chase grow to be the largest bank by deposits by 2011.

Speaker 1: He's going to look at something like Washington Mutual and say it's going to give us more deposits and more customers. We're getting it at a super cheap price. The government's supposed to share the losses. This is a risk that is worth taking.

Speaker 2: You know, WAMU put us into California, where we really were in Florida. We had a very small presence. Washington state.

Speaker 0: J.P. Morgan grew even larger in May after it bought First Republic Bank, the second largest bank to fail in US history. But this also raised concern that the bank was too big to fail, meaning that if it were to collapse, it would have a devastating impact on the economy.

Speaker 3: Are you too big to fail?

Speaker 2: I don't know what that word means anymore.

Speaker 3: JPMorgan Chase does benefit from the perception of being too big to fail. I know they don't like to hear that. They think they're very well run and they are a great bank. But I'm sorry, they get a benefit. Nobody thinks, even if JPMorgan Chase got into trouble, nobody thinks it would ever be closed.

Speaker 0: But Diamond has made missteps in the past. In 2012, the bank lost more than $6 billion after an employee made a series of risky bets.

Speaker 2: This transaction that you said morphed, what did it morph into, Russian roulette? It morphed into something I can't justify. That was just too risky for our company.

Speaker 3: He does impose accountability in the context of risk. That could

Speaker 4: be 1 of your best risk management tools is to make sure,

Speaker 3: you know, tell your people, go out

Speaker 4: and take some risk, make some money, understand the risk, manage the risk, stay within our risk appetite and understand, you know, if you take stupid risk, you're going to be accountable.

Speaker 2: I said, I always don't put me on the pedestal. Just just just stop that. Companies make mistakes and CEOs make mistakes.

Speaker 0: While Diamond's management style has helped the bank grow even larger than its competitors. It's also expanded his role in the industry.

Speaker 1: If you're the Treasury secretary and there's something broken in the banking industry, Jamie Diamond's your first call.

Speaker 0: Treasury Secretary Janet Yellen called Diamond to kickstart First Republic's initial rescue effort.

Speaker 1: It bought the bank time. It did seem to help the crisis and really other CEOs and other banks have been like it was it was Jamie.

Speaker 0: And over the years, Diamond has become the go-to voice for banks in Washington.

Speaker 2: Members of the committee, I appreciate the opportunity to talk about JPMorgan Chase, the role of America's largest banks as a force for good for the country, its citizens, and the global economy.

Speaker 1: When they all go to testify pretty much every year in front of Congress, the other CEOs are like, let's let Jamie answer the questions. We'll let him be the guy out front. And part of that's because he's built this reputation and he's less worried about losing his job or getting regulators mad at him.

Speaker 2: I think it would put smaller banks in a position that when a crisis hits, they will virtually have to stop lending because putting up those reserves would be too much at precisely the wrong time. So I do think it becomes an issue for you all to reconsider.

Speaker 0: And Diamond is known to be outspoken in public statements too.

Speaker 6: Bitcoin itself is a hyped up fraud.

Speaker 7: It's almost an embarrassment being an American citizen traveling around the world and listening to the stupid s*** we have to deal with in this country.

Speaker 6: You ask me, I'll tell you my opinion is that's not a JPMorgan opinion and stuff like that.

Speaker 1: He is the same person privately and publicly. Like, he'll curse, he'll get excited about things, he'll dismiss other things. Like, he is Jamie.

Speaker 0: A spokesperson for JPMorgan Chase and Jamie Dimon declined to comment for this video. After nearly 2 decades atop JPMorgan Chase, There have been questions about who could fill his shoes when he decides to move on.

Speaker 1: He truly has no hobbies, from what I can tell. Even his friends are like, he doesn't do anything other than run the bank.

Speaker 0: But Diamond doesn't plan on going anywhere soon.

Speaker 2: I'm not going to play golf. I love my country. I love my company. I love my family. I'm going to do something.

I can't do this forever. I know that. But my intensity is the same.

Speaker 1: A normal person might say it's time to hang up the shoes, but Jamie Dimon is not necessarily a normal person.

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How Jamie Dimon Built Chase Into the U.S.’s Most Powerful Bank | WSJ