These are all probabilities and possibilities and hypothetical numbers. And if I review, like just look at charge-offs like actual results. And so €“ and we break this out, but it’s hard to describe, and every bank does it slightly differently, and every bank has a slightly different base case and slightly different weighting of adverse cases, etcetera. And so we’re just trying to make it as simple as possible.
Ken Usdin: Yes, I hear you. The challenge at this time is that we’re going to have the income statement effect way ahead of that charge-off. So we’re all trying to just fit for that. But I appreciate that. Thanks, Jamie.
Jamie Dimon: And once the any base case gets to where you expect relative adverse, you’d be adding to $6 billion of reserves before you have charge-offs.
Ken Usdin: Exactly. Right.
Jeremy Barnum: Hey, Ken, maybe just out of interest. Implied to your question might be a little bit, to what extent does this quarter’s build sort of is a down payment on the $6 billion? And the answer to that question is much less than all of it because a lot of it was driven by loan growth, but in some of it, as Jamie says, is driven by the flow-through of the downward provision in the central case. You could say, subject to the caveat that this is a little bit or not science, that there is some down payment on that $6 billion.
Ken Usdin: Yes. Understood. Thanks for all that.
Operator: The next question is coming from the line of Betsy Graseck from Morgan Stanley. You may proceed.
Betsy Graseck: Hi, good morning.
Jamie Dimon: Hey, Betsy.
Betsy Graseck: I wanted to understand a little bit about how you are thinking about managing the expense line as you go through this year. I know we talked already about how it’s hard to predict NII. Obviously, markets has pushes and pulls. Can you help us understand how you are thinking about delivering operating leverage? Where the elements of the expense base are needing to be invested and so you really can’t touch? And where there are opportunities to potentially peel back such that if you get a weaker rev line, you can still deliver positive operating leverage?
Jamie Dimon: Sure. So, I mean as we have €“ as you know, obviously, we tend to break down our expenses across our three categories. And in some sense, the category that you are addressing is the volume and revenue-related expense, which we highlight because it should pre-symmetrically respond to a better or worse environment and thereby contribute to operating leverage. So, for example, in this year’s ultimate outcome, and the number that we want on printing on Page 22, the year-on-year change in volume and revenue-related expense, still we are finding the numbers, we will probably show you more at the Investor Day, but it’s probably close to $1 billion. In other words, year-on-year decline, whereas next year, we are assuming something more like flat.
So, while the sort of year-on-year dollar change in the outlook sort of €˜21 to €˜22, €˜22 to €˜23 is comparable, the mix is quite different actually. And so for example, if we wound up being long about the type of environment that we are budgeting for, you would expect a significant drop in the volume and revenue-related expense number that’s in the current outlook, and that would contribute to operating leverage. For the rest of it, we are always generating efficiency. And we have worked just as hard at that, whether the revenue environment is good or bad. And as you know, we invest through the cycle. And so broadly, our investment plans really should be that sensitive to short-term changes in the environment. Of course, certain types of things like marketing investments in the card business, in particular, the math of what we expect the NPV of those things to be the cycle may change in a downturn.
