Jeremy Barnum: Yes. I mean I think that’s a risk that we manage quite tightly as a company. Our exposure to the sort of non-bank financial sector are probably defined. And of course, as we thought a little bit about what normalized wholesale charge-offs could look like through the cycle. they are obviously higher than effectively zero, which is what we have now. But we feel confident with our credit discipline and what we have on the books.
Gerard Cassidy: Great. And then as a follow-up question, you guys did a good job building up that loan loss reserve this quarter. Two questions to that. First, the Shared National Credit exam results are always released in February. Does the reserve buildup takes some of that into account? And second, how much of the reserve build was more of a management overlay versus your base case, the quantitative part of the decision-making for building up the reserve.
Jeremy Barnum: Yes. I mean, I’ll give you that answer, but I’m oversimplifying a lot. I would say that.
Jamie Dimon: Over simplify.
Jeremy Barnum: Yes, yes, I know. I got it. The sort of conservatism of the management overlay did not change for all intents and purposes quarter-on-quarter. I think that’s the best way to think about that, Gerard.
Gerard Cassidy: And then sure Natural €“ yes, go ahead.
Jamie Dimon: The National Shared Credit thing will not affect our results materially.
Gerard Cassidy: Very good. Thank you, Jamie.
Operator: The next question is coming from the line of Ken Usdin from Jefferies. You may proceed.
Ken Usdin: Hi, thanks. Good morning. I’m just wondering if you can help us understand the ongoing efforts on your mitigation for the RWAs in advance of all the points we’ve made already about the pending capital regime. How do we €“ can you help us understand what type of effects that has, if any, on parts of the income statement, whether it’s NII or the trading business?
Jamie Dimon: Yes. So if I just take that one. Just assume we’re going to have modest growth in RWA. And in every single businesses, mortgages, loans, derivatives, how we hedge CVA and stuff like that, we take access to manage RWA. Do not €“ it does not really affect the business that much. It might 1 day, but it doesn’t affect it today. And so we don’t build in somehow we lose a little bit of this, a little bit of that. And there €“ and the biggest opportunity down the road will be a reopening in the securitization markets. and they are still very tight. And I think 1 day, they will reopen.
Ken Usdin: Okay. And then on the €“ one follow-up, just coming back to the reserving process. Can you just help us understand relative to the 5% peak in 3Q that you gave for your unemployment rate quarterly average in the 3.9 average baseline? Just where does this fourth quarter reserve get you to? And does that rule of thumb that you kind of gave us last quarter still stand in terms of scenario analysis on potential builds ahead of this mild recession?
Jamie Dimon: Can I just make it real simple? The base case, okay, is where it hits almost that 5% unemployment. Then you probability weight other scenarios. That’s why Jeremy is saying the reserve is higher than the base case. We didn’t change the probabilities in our weighting. But of course, it got worse and the base case got worse. That’s all it is, which still is a good benchmark, you’ll keep in mind, is if we got to a relative adverse case, all that a 6% unemployment, we €“ and then once you get there, you assume the average weighting, you have wins. It could get better or it could get worse. At that case, we would need about $6 billion more. When the base case itself deteriorates, we’re moving closer to relative adverse, that’s all it is.
