Jamie Dimon, the longtime JPMorgan Chase CEO, is placing some of the blame for the recent banking crisis on federal regulators but emphasized that many parties dropped the ball in the lead-up to Silicon Valley Bank’s collapse.
The longtime JPMorgan Chase CEO said in his annual letter to shareholders on Tuesday that the risks at places such as SVB and Signature Bank should have been more apparent to the government.“Regarding the current disruption in the U.S. banking system, most of the risks were hiding in plain sight. Interest rate exposure, the fair value of held-to-maturity portfolios and the amount of SVB’s uninsured deposits were always known – both to regulators and the marketplace,” he wrote.
Dimon noted that “the stress testing based on the scenario devised by the Federal Reserve Board never incorporated interest rates at higher levels." Dimon made a point of emphasizing that the “crisis” isn’t over yet for the banks. He said that even when it does come to an end, there will continue to be repercussions for years to come. Still, he said the current situation in the banking and financial systems are nothing like what occurred during the 2008 financial crisis, which resulted in the worst recession since the Great Depression.
The banking situation has added pressure to the economy, which is already struggling under the weight of rising interest rates. The fear and uncertainty have even begun spreading to the larger global banking system.
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