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Business News/ News / World/  Banking crisis has increased the odds of a recession, says JPMorgan's Jamie Dimon

The US bank crisis that rattled global markets last month is probably nearing the end, even if more unforeseen failures occur, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said.

Only a handful of lenders have the problems that toppled Silicon Valley Bank, and when the industry starts reporting quarterly earnings next week, the numbers will probably be good, Dimon told CNN in an interview Thursday. Asked if more bank failures might come, he said he didn’t know.

“But if there are, I know honestly they’ll be resolved and it will probably be the last of them," Dimon said. “I think we’re getting near the end of this particular crisis."

Dimon, 67, has run JPMorgan since 2005, and is the only CEO from the 2008 financial crisis still in charge of a big bank. In a CNN report earlier Thursday, he said the recent turmoil in the financial industry had probably made a US recession more likely, though a downturn won’t necessarily happen.

“We are seeing people reduce lending a little bit, cut back a little bit and pull back a little bit," the broadcaster quoted him as saying.

US regional banks have been in turmoil after a run on deposits struck SVB and several other lenders. Rising interest rates depressed the value of bonds they bought when interest rates were low, and a sudden surge in customer withdrawals forced some of them to sell those assets at a loss.

Dimon’s remarks build on an assessment he offered in an annual letter to shareholders earlier this week, in which he acknowledged that the collapse of Silicon Valley Bank and the emergency sale of Credit Suisse Group AG to UBS Group AG had “significantly changed the market’s expectations" for the economy.

“It has provoked lots of jitters in the market and will clearly cause some tightening of financial conditions as banks and other lenders become more conservative," he said in the letter. Unclear, he wrote just days ago, is whether consumer spending may slow.

The government shouldn’t overreact to the banking crisis by imposing more rules on the industry, Dimon said.

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This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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Updated: 07 Apr 2023, 10:51 AM IST
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