JPMorgan Chase chairman and chief executive Jamie Dimon spoke to Saloni Shukla and MC Govardhana Rangan in an interview.



Edited excerpts:



Last time we met you were very optimistic about India ... one year on our GDP growth has suffered ... what do you have to say now?



I don't worry about quarterly numbers ... India is growing faster than any other country on the planet. The government has made a lot of changes, which is going to be very good for the future. The effect that they have next quarter is not going to say much but a lot of good changes that are been made with Aadhar, GST, and the Bankruptcy law, all of which are and will be very positive.



You met the Prime Minister just before meeting us what is the message that he gave you?



You have a very good and strong Prime Minister and he has made a lot of changes. We got an update on some of the actions that the government has taken and more actions that he wants to take such as more affordable housing. We shared with him what JP Morgan does here in India. We do research on 120 Indian companies and this research, along with our macro-economic views, are shared around the world, which helps the world to learn more about India. We also serve almost 500 MNCs that conduct business in India.



Most people have criticized demonetisation especially because of the growth lost ... Do you see any long term benefits of demonetisation?



The purpose was to create bank accounts and address the issue of illicit money. It was a bold thing to do, which most countries have not done. But if countries want to tackle corruption, it’s a wise thing to do at one point of time. Corruption holds countries back because it hurts small businesses, individuals and the government.



Emerging economies including India are getting a lot of fund flows. There is a perception that Indian earnings do not have the potential to attract such fund flows?



Markets are markets, they go up and they go down. I think good investors are pretty wise and speculators are going to come and go. But part of this reflects the optimism about the long term future of India. You have the 5th largest economy in the world. When I was here a year ago you were 7th and I think the stock market reflects a little bit of that.



It has been said that foreigners are more optimistic about India than Indians. You must have interacted with a fair number of CEOs during this visit, is that sense that you get?



This is a universal phenomenon, if you went to America you would probably say the same thing. Countries are generally more sensitive to their own problems, which is a good thing because they want to change them. People on the outside tend to look at what is the pace of change - what is different now than before and the difference is huge.



How big a geopolitical risk is the United States - North Korea standoff?



In life, there is always a huge amount of geopolitical risk - some are known and some are unknown and some are good. People forget the good ones and there is a tendency to focus only on the bad ones. If we read all the negative news out there then we always focus on the risk. Undoubtedly, the biggest risk for mankind are nuclear weapons and the governments of the world have to get their hand around this because if they don't you have proliferation and they will land up in the hands of someone who will actually want to use them. It’s a serious issue. The way I look at North Korea is that the chance of something bad happening is higher but there are a lot of reasons why it is not going to happen tomorrow. The current situation is not going to stop the world from growing, its not going to stop China and America from negotiating deals, its not going to stop India from growing, the world will go on and hopefully the North Korea issue is contained.



What are your thoughts on the Fed announcement?



I think it’s good that they are raising rates and starting to sell some of the bonds. The thing you have to look at isn't just the what it’s also the why and the when. Right now, they are doing this while the US and global economy are healthy. It’s going to be a lot easier than if global economy were unhealthy. To me, the interest rates don't matter, it doesn't matter as much as a healthy and growing economy. If they have to do that in an unhealthy economy that is a whole different issue. It’s a little risky because we have never had a mass unwind of QE before. I can't tell you what is going to happen because this has never happened before, but I think they are doing the right thing.



The market believes that inflation is not moving up and the growth is there. There is a disconnect between what the market is factoring in and the fed is doing?



It’s been that way for a couple of years. I think it’s wrong that inflation at 1.7% or 1.5% is bad and 2% is good ... people are making a huge deal about a very small difference. If you ever dig into these inflation numbers they are not accurate in the first place so a small difference does not mean anything. I have believed that America's growth is sub-optimal for a whole bunch of policy reasons. But, I think the fed is trying to be very responsive and not react too quickly. You will see inflation tick up a little bit and anecdotally you will see wage inflation in United States which is a good thing. I think wages going up is a good thing and even when business CEOs start complaining about it, it will still be a good thing.



You said American growth is sub-optimal what do you think is the potential?



I think our corporate tax system is the worst in the world and is not conducive to growth. Regulations are stifling small business. They have been hurt by the lack of credit and strangled by lot of little regulations that make it hard for them to form a new business. We have been very slow to invest in infrastructure and our education system is not producing enough people who have the right skills that get them jobs. So, we have 5 million open jobs but the people we have are in the wrong place and have the wrong skills so we have got to do a better job. If we got these things right we would be growing faster.



Fed seems to be firmly on the path of unwinding the QE whereas BoJ and ECB are not showing any signs of unwinding. So hows does this play out in the international financial markets ... will that lead to a destabilised financial market in a few years?



I wouldn't use the word destabilize, they don't have to sell all of it. As long as the economies are healthy they can withstand the sale of some of these bonds. I do worry about destabilisation if inflation gets too high but if that happens they can reverse course and they can reduce rates again. They have other tools they can use too.



Your views on tax rates have been rather critical but nothing seems to have changed so far



You can't have an uncompetitive system and think that you are being competitive - that is not possible. I tell the people you need a vibrant business economy to create jobs and wages. It’s not the only thing you need but you need it. Every study shows that a competitive tax system is good for the average people of our countries. Some believe that lower taxes just means feeding the pockets of corporations - it isn’t. All that money would be paid out and reinvested.



You said, I quote about “the stupid shit we have to deal with in this country.” Does this reflect the disappointment with Trump administration’s inability to move in any kind of economic reform?



We haven't focused on fixing the regulations that are damaging the economy. We haven’t made our tax system competitive. We haven't built a major airport in 25 years and it takes 10 years to get a permit to build a bridge. Someone told me it took 17 years to build the freedom tower but it only took 18 months to build the Empire State Building – that’s frustrating. And I would expect all American citizens to be frustrated about that because it damages economic growth.



I think the current administration is trying to fix some of those things. They have been very active on the regulatory front, they are trying to get people jobs and they are trying to reform corporate tax but it’s still early in the administration. We will see how much they get done. The agenda of infrastructure, regulatory reform, tax reforms are critical and they have got some very smart people trying to get things done in Congress.



Its almost 10 months into the Trump administration, there was a lot of hope that some of the adverse regulations will be rolled back. But it hasn't moved at all, is there a lot of frustration?



I think people are a little more patient than that and no one expected it to happen overnight. Tax reform will take a year or two to happen. They are trying to do it at a very accelerated pace and we will see how it pans out. We don’t have any infrastructure proposals out there yet and as far as regulatory reform is concerned they have good people in the agencies. These agencies are sort of making regulatory changes. Metal and mining companies have already seen a change but we haven't seen changes in the financial sector because the same people are still running all the banking related agencies. Eventually, we should see modifications.



What is your view on the ongoing political debate on immigration?



I am a product of immigrants, none of whom finished high school. America has been a melting pot and it’s been a wonderful thing for the vitality of the country. There have been some legitimate arguments around America's border controls and I understand that there should be proper immigration control. On the other hand we support DACA. I would support a proper path to citizenship and I would be more ambitious about allowing educated people in.



You created a storm over your Bitcoin comment, you were criticised a lot ... many people said that central banks can stop it.



We already have digital currencies ... you can have digital rupee, so I am not against digital currencies. I am talking about the creation of money and value out of thin air. Governments now look at it like it’s a novelty but the bigger it gets the less of a novelty it becomes. Nations make currencies but they like to have central banks controlling them. They like to know who has it, where it is going and why is it going there. And that is not Bitcoin. My point is, the bigger Bitcoin gets the more likely governments are going to close it down... China just did.