JPMorgan Chase CEO Jamie Dimon said that turmoil within the banking system has raised the odds that the U.S. economy tumbles into a recession this year.
JPMorgan Chase CEO Jamie Dimon speaks during a Bloomberg Television interview at the JPMorgan Global High Yield and Leveraged Finance Conference in Miami on March 6, 2023.
"As I write this letter, the current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come," he wrote in the letter. "But importantly, recent events are nothing like what occurred during the 2008 global financial crisis ." The problems in the financial sector began with the implosion of Silicon Valley Bank in early March. Rising interest rates sent the value of dated, long-term securities tumbling, and a sudden rush of customer withdrawals forced them to sell those assets at a loss.
Regulators seized SVB on March 10 and took control of Signature Bank – which was besieged by similar problems – two days later."Ironically, banks were incented to own very safe government securities because they were considered highly liquid by regulators and carried very low capital requirements," Dimon wrote.
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