In his widely read annual letter to investors, Damon urged Joe Biden’s government to take a stronger stance against the “serious new geopolitical reality” that emerged after the Russian invasion of Ukraine, saying it was up to the “democratic nations to take a stand.” against all forms of evil “. Dimon, one of the most high-profile bosses to comment on the conflict so far, also reported the bank’s potential $ 1 billion loss due to its direct exposure to Russia. JP Morgan announced it was ending operations in Russia – which employs about 160 people – last month. “As I write this letter, the war in Ukraine has been raging for much more than a month and is creating a major refugee crisis. We do not know what the outcome will be, but the hostilities in Ukraine and the sanctions on Russia already have a significant economic impact. “They have disrupted global markets for oil, commodities and agricultural products.” However, Dimon said the wider impact of the war, including the “potential restructuring of world order”, was far more significant. Noting that the war could affect geopolitics for decades, he added: “We have to face the Russian challenge with bold solutions.” Damon urged the United States to develop a Marshall Plan to reduce the West’s dependence on Russian fossil fuels – citing Harry Truman’s 1948 aid program that helped Western Europe recover from World War II. “Our European allies, who are heavily dependent on Russian energy, are demanding our help,” he said. “As we see – and we know from previous experience – the supply of oil and gas can be easily disrupted, either physically or with additional sanctions, significantly affecting energy prices. “National security requires energy security for us and our allies abroad.” The tension is already escalating due to the demand of the Russian President, Vladimir Putin, that, from April 1, all the gas bought from foreign countries must be paid in rubles. The G7 countries have so far rejected Moscow’s request. The head of the banks added that the US response should also include a larger US military budget and the deployment of more troops on the NATO border “as appropriate”, adding that the US government should commit billions of dollars to the reconstruction of Ukraine. and support for migrants in Europe. “America must be prepared for the possibility of a full-scale war in Ukraine with unpredictable consequences. We must prepare for the worst and hope for the best. “We must see this as a wake-up call,” the letter urged. “We must make this a permanent, long-term stand in favor of democratic ideals and against all forms of evil.” Damon also urged the Biden government to “impose sanctions”, but acknowledged that the move would have economic implications for Russia. “Together with the unpredictability of the war itself and the uncertainty surrounding the global supply chains, this creates a potentially explosive situation,” Dimon added. Subscribe to the daily Business Today email or follow the Guardian Business on Twitter at @BusinessDesk JP Morgan analysts already predict that eurozone GDP will grow by about 2% in 2022, instead of the 4.5% expected before the invasion of Ukraine. Meanwhile, the US is expected to grow GDP by only 2.5% compared to previous estimates of 3% for 2022. He added that the United States should restructure its supply chains and ensure that they no longer rely on countries with “different strategic interests” to supply materials considered vital to national security, such as rare earths or semiconductors. Instead, the US should rely solely on domestic companies or “completely friendly allies” for basic goods and services. “We can not and should never rely on procedures that can and will be used against us, especially when we are most vulnerable,” Dimon said.
