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FOX Business Network’s (FBN) Melissa Francis spoke exclusively with JPMorgan CEO Jamie Dimon live from Florida about the company’s expansion and the economic challenges facing the United States today. When asked about whether the Volcker rule really serves to protect consumers, Dimon said “Paul Volcker by his own admission has said he doesn’t understand capital markets. He has proven that to me.” Dimon went on to say we won’t destroy the market, it will simply “go overseas.” Regarding the mortgage settlement, Dimon stated that while Housing and Urban Development Secretary Shaun Donovan “did a great job,” the mortgage “standards are probably a little too tight.” On the topic of the crisis in the Eurozone, Dimon expressed confidence that they will “figure out a way” to come out of debt and while “a lot of banks have pulled back” JPMorgan will “stay there and service our clients and probably gain a little share in some areas because of it.”

Excerpt and the videos are below:

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Watch the latest video at <a href=”http://video.foxbusiness.com”>video.foxbusiness.com</a>On the Volcker rule:

“The part where they said no propriety trading we are fine with. The part about market making is the part that everyone is writing long issues about. We are a store, the business is driven by clients, and we have the widest and deepest capital markets in the world. Spreads have come down, and that is good for the buyer seller. The cost of that have come down dramatically. Paul Volcker by his own admission has said he doesn’t understand capital markets. He has proven that to me. We have to be very careful we don’t take the best, widest, deepest, and most transparent capital markets and because there are some flaws, destroy it. And we aren’t going to destroy it, it will go overseas. Remember when the client calls JPMorgan, if we don’t give them the best price, we don’t get the business. But the best price is a huge benefit to them We don’t make huge bets. I understand the goal to make sure companies don’t take huge bets on their balance sheets. Protecting the system I agree with, but starting to talk about intent; for every trader, we are going to have to have a lawyer, compliance officer, doctor to see what their testosterone levels are, and a shrink, what is your intent?”


On the mortgage settlement:

“In general it’s a step forward. Housing is going to get better with the economy and jobs, but we have not four years after the crisis come up with rational mortgage policy. Shaun [Donovan] did a great job, but I hope they take it to the next step. It’s still too hard to get a mortgage out there. The good news is all the bad mortgages are gone, but standards are probably a little too tight.”


On where we are in the housing crisis:

“I think we are at the bottom. Housing prices are still going down a little bit. All the lean indicators are good; rental prices are up, mortgages are at all time affordability.”


On the European debt crisis and the risk of a domino effect impacting the United States:

“I think there is a 70% chance they are going to muddle through.  I think they have the will and they are trying to figure out a way. There is a fat tail out there. If you have an unraveling of the Euro, that could be a global economic disaster. I don’t think it’s going to happen, but it’s possible. We have 15 billion of net exposure in Italy and Spain, and we are staying. We have been doing business with the clients for 50 years, and we hope to be doing business with them in 50 years. We take a risk doing that, but I think it’s a rational risk. A lot of banks have pulled back, but we are going to stay there and service our clients and probably gain a little share in some areas because of it. “


On whether he is looking to acquire banks in the Eurozone:

“We are not looking to acquire. Fortunately the ECB came in and made funding easy for these banks. I was afraid they were going to start liquidating assets like Lehman did and that causes real problem in the marketplace. What we see is a more orderly selling of assets. I actually credit that to the ECB.”


On the current economic climate in the United States:

“America is growing by 3 million people a year, businesses are expanding; not dramatically. Our sense is there is a recovery going on; its mild, but its broad based, and it may be strengthening over time. We serve our clients in good times and bad. We are always expanding regardless of the economy.”


On the disagreements in Washington as to how to stimulate the economy:

“Thoughtful, rational, coordinated policy, that helps us recover. We have made this recovery slower and worse by uncoordinated policy and other things that were misguided. When businesses complain as much as they do about regulation, my experience is there is usually some truth to it. Business in America is a great thing. Yes, businesses do something wrong, but business is a great thing. And we denigrate endlessly out of Washington business like it’s a bad thing.”


On whether Washington is doing anything right now to dissuade them from hiring:

“Not us. I think policy is much harder on smaller banks. Some of these rules are tougher on them than they are on us. And I don’t think that’s a good thing.”


On Occupy Wall Street:

“People in America have the right to speak their mind. It was peaceful. I agree with them; the institutions of America, broadly defined, let us down. That includes Wall Street, Washington. When you get beyond that and blame all equally, that’s not accurate. That leads to bad policy. How do you fix the problem, while celebrating work, success, meritocracy. Let’s not throw the baby out with the bath water. That’s what made the country great and it’s a mistake to act like that’s the problem.”


On how he would like to see Washington proceed to stimulate the economy:

“American business is moving beyond the government. Turn the TV off and get back to business.”