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JP Morgan CEO Jamie Dimon – “Banks are playing an increasingly smaller role in the financial system.”

**JP Morgan Annual Letter To shareholders** [Threats from every angle](https://reports.jpmorganchase.com/investor-relations/2020/ar-ceo-letters.htm#banks-enormous)

>Banks are playing an increasingly smaller role in the financial system.
>
>In the chart below, you will see that U.S. banks (and European banks) have become much smaller in size relative to multiple measures, ranging from shadow banks to fintech competitors and to markets in general.
>
>Whether you look at the chart above over 10 or 20 years, U.S. banks have become much smaller relative to U.S. financial markets and to the size of most of the shadow banks. You can also see the rapid growth of payment and fintech companies and the extraordinary size of Big Tech companies. (As an aside, capital and global systemically important financial institution (G-SIFI) capital rules were supposed to reflect the economy’s increased size and banks’ reduced size within the economy. This simply has not happened in the United States.)
>
>Some regulators will look at the chart above and point out that risk has been moved out of the banking system, which they wanted and which clearly makes banks safer. That may be true, but there is a flip side – banks are reliable, less-costly and consistent credit providers throughout good times and in bad times, whereas many of the credit providers listed in the chart above are not. More important, transactions made by well-controlled, well-supervised and well-capitalized banks may be less risky to the system than those transactions that are pushed into the shadows.
>
>2. The growth in shadow and fintech banking calls for level playing field regulation.
>
>The chart below shows the potential regulatory differences between being a bank and being a nonbank or a fintech company – though this varies for each type of company on each item depending upon its legal and regulatory status. In some cases, these regulatory differences may be completely appropriate, but certainly not in all cases.
>
>When I make a list like this, I know I will be accused of complaining about bank regulations. But I am simply laying out the facts for our shareholders in trying to assess the competitive landscape going forward.
>
>It is completely clear that, increasingly, many banking products, such as payments and certain forms of deposits among others, are moving out of the banking system. In addition, lending in many forms – including mortgage, student, leveraged, consumer and non-credit card consumer – is moving out of the banking system. Neobanks and nonbanks are gaining share in consumer accounts, which effectively hold cash-like deposits. Payments are also moving out of the banking system, in merchant processing and in debit or alternative payment systems.



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8 Comments

  1. During the first lockdown my bank sent me two letters.
    The first was to let me know that my overdraft interest was increasing from 19.99% to 39.99% to “encourage other ways of borrowing”.
    The second was the inform me that my account interest was decreasing from 0.15% to 0.01%.

    I just wish the company I worked for would pay in crypto to remove all bloodsucking middle men

  2. He says this but at the same time governments everywhere are racing to regulate crypto, countries are launching their own cryptocurrencies, some are even considering banning crypto, banks are becoming middlemen for crypto investments and large exchanges control most of the crypto market. PayPal lets you pay with crypto but won’t let you withdraw and many wallets don’t even give you your keys.

    We are not winning this battle. We have almost lost it.

  3. It’s incredible to me that everything we believed in for years, is now becoming the accepted truth. Institutions are here, more and more respected boomer investors are accepting they were wrong on crypto and many people who listened to them may change their mind too. Congrats you all. “First they ignore you, then they laugh at you, then they fight you, then you win.” – we are winning.

  4. And they are scared shitless becuse they know they cant fight against Crypto anymore, Crypto always finds a way and wins.

    They have 3 options

    1. Sitt back and see Crypto gain more traction and more people getting economic freedom without them getting any.

    2. Join us and try to create some Crypto themself and hope we jump on theirs.

    3. Try to fight us once again and lose the fight.

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