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JPMorgan Chase and Company President and CEO Jamie Dimon testify before the 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.
Elisabeth Frantz | Reuters
c. B. Morgan Chase Chief Executive Jamie Dimon said on Thursday that markets will be gripped by panic as the United States approaches a default on its sovereign debt.
Dimon told Bloomberg in a televised interview that an actual default would be “catastrophic” for the country. Dimon said he expects the worst-case scenario to be avoided, because lawmakers will have to respond to the growing concern.
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“The closer you get to that, the panicked you get,” he said, in the form of volatility in the stock market and turmoil in Treasurys.
Dimon joined a group of business figures and administration officials who made dire predictions about the consequences of failing to raise or suspend the US debt limit and allowing the world’s largest economy to default on its bonds. Treasury Secretary Janet Yellen said the idea of a country defaulting should be “out of the question” and would lead to economic disaster.
“If it gets to that point of panic, people have to react, we’ve seen that before,” Dimon said.
But, he added, “It’s a really bad idea, because panic becomes a bad thing.” “It could affect other markets around the world.”
war room
JPMorgan, the largest US bank with approx 3.7 trillion dollars In assets, it is bracing for the risk of a US default, Dimon said.
Such an event, he said, would ripple through the financial world, affecting “contracts, securities, clearinghouses and certainly affecting clients around the world.”
He said the bank’s so-called war room meets once a week, a rate that will switch to daily meetings around May 21 and then three meetings a day thereafter.
He urged politicians from both major American parties to make compromises and avoid a devastating outcome.
“Please negotiate a deal,” Damon said.
other banks
In a wide-ranging interview, Dimon said he speaks daily to regional bank executives amid concerns raised by the Silicon Valley bank. collapse in March. Last week, JPMorgan emerged as the winner of the government-brokered auction of the First Republic.
He said that the regional banks are “very strong” and will achieve good financial results, but managers are worried because of the inflows of banks that have brought down three companies.
“I think we have to assume there will be more” to the regional banking crisis, he said.
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