JPMorgan Chase & Co., the largest U.S. bank by assets, is “very conservative” in investing the firm’s excess cash, said Chief Executive Officer Jamie Dimon.
“We create deposits around the world, and we’re very conservative,” Dimon said today in a conference call with reporters after the New York-based firm reported first-quarter earnings. “The portfolio does change over time as we change our views.”
Bruno Iksil, a London-based trader in JPMorgan’s chief investment office, built positions in contracts linked to the value of corporate debt that market participants said were so big that they moved the market. JPMorgan’s chief investment office has been transformed in recent years by Dimon into a unit that makes bigger and riskier speculative bets with the bank’s money, five former employees said this week.
Holdings in the chief investment office include about $70 billion of European mortgage-linked debt, said Dimon, 56. The bank’s regulators can see everything the company does whenever they want, he said.
The firm has more money from deposits than it has extended in loans and it invests the difference, about $360 billion, “in a variety of very high-grade securities,” Chief Financial Officer Douglas Braunstein said.
“That generates earnings for us, and it also balances our interest-rate risk,” Braunstein said on the call. “We are very comfortable with the positions we have.”