Todd Maclin

October 14, 2009

By Justin Tang

JPMorgan Chase Commercial Banking CEO, Todd Maclin, spoke on the status of the financial sector at UCLA Anderson's Korn Hall on Thursday, October 8.  While the company survived the banking crisis and now holds billions of dollars in assets including the recent purchase of Washington Mutual, Maclin still believes areas of the financial sector look bleak.

Speaking to several hundred Anderson students about the continuing decline of the financial services landscape, Maclin noted that it is fortunate that banks no longer face systematic risk, but he still advocated caution within the sector. "America is still in a soft recovery, especially as unemployment rises,"  Maclin said, pointing to the Federal Deposit Insurance Corporation's finding that there are still 416 problematic banks.

The commercial real estate market shows the greatest indication of trouble, Maclin said, adding that the "signs of distress are only beginning." Statistically, reports claim that five of the fifteen largest regional banks have more than 200% of their capital exposed to significant risk.  Additionally, commercial real estate has an overall outstanding debt of $3 trillion that needs to be refinanced soon.

Banks have not been paying enough attention to these glaring numbers Maclin admitted.  He emphasized the importance of the portfolio theory, which tells investors to spread risk by diversifying their assets and he also expects Congress to pass greater bank regulation soon, which could completely overhaul the entire sector for the future.

In his response to the concerns of ethical bank practices, he responded by saying that JPMorgan is a "leader in Washington, in the banking landscape, and in civic duties."  Maclin concluded the event by insisting that, "JPMorgan Chase is healthy and well capitalized ... and we will protect our franchise from unethical banking practices." 

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