JPMorgan Chase and the company’s Chairman and CEO Jamie Dimon testify before a Senate Banking, Housing and Urban Affairs hearing on “Annual Oversight of the Nation’s Largest Banks” on Capitol Hill in Washington, US, September 22, 2022.
Elizabeth Frantz | reuters
An actual default would be “potentially catastrophic” for the country, Dimon told Bloomberg in a televised interview. Dimon said he hoped the worst would be avoided, however, and lawmakers would be forced to respond to growing concern.
“The closer you get to it, you get panic” in the form of volatility in the stock market and volatility in Treasuries, he said.
Dimon joined a host of business figures and administration officials who made dire predictions about the consequences of failing to raise or suspend the US debt ceiling and allowing the world’s largest economy to default on its bonds. Did. Treasury Secretary Janet Yellen has said that the idea that the country could default “impossible“And that would be an economic catastrophe.
“If it gets to that panic point, people have to react, we’ve seen that before,” Dimon said.
But “it’s a really bad idea, because panic becomes something that’s not good,” he said. “It could affect other markets around the world.”
JP Morgan, the largest bank in the US $3.7 trillion In assets, one is preparing for the risk of an American default, Dimon said.
Such an event would ripple through the financial world “affecting contracts, collateral, clearing houses, and of course affecting clients around the world,” he said.
He said the bank’s so-called war room is gathering once weekly, a rate that will switch to daily meetings around May 21 and three meetings daily thereafter.
He called on politicians from both major US parties to seek a compromise and avoid a disastrous outcome.
“Please negotiate a deal,” Dimon said.
In a detailed interview, Dimon said he talks daily with regional bank executives amid concerns raised by the Silicon Valley bank. collapse in March. Last week, JP Morgan emerged as the winner At a government-brokered auction for First Republic.
He said the regional banks are “quite strong” and will have good financial results, but managers are concerned about the way the banks are run, which has toppled three firms.
“I think we have to assume that there will be a little bit more to the regional banking crisis”, he said.