Even if more banks collapse, JPMorgan Chase & Co. CEO Jamie Dimon believes the American bank crisis that shook global markets last month is nearing a conclusion.
Dimon told CNN Thursday that just a few lenders had the issues that brought down Silicon Valley Bank, therefore next week’s quarterly profits would likely be positive. He declined to predict future bank collapses.
“But if there are, I know honestly they’ll be resolved and that will probably be the last of them,” Dimon added. “I think this crisis is nearing its end.”
JPMorgan’s CEO, Dimon, 67, has led the firm since 2005. In a CNN broadcast earlier Thursday, he said current banking industry turbulence has undoubtedly made a US recession more likely, though it may not materialize.
“We are seeing consumers reduce lending a little bit, cut down and draw back,”
A run on deposits at SVB and other American regional banks caused havoc. Increasing interest rates devalued bonds they acquired while rates were low, and a rapid rise in client withdrawals drove some to sell those assets at a loss.
In an annual letter to shareholders earlier this week, Dimon recognized that the collapse of Silicon Valley Bank and the emergency sale of Credit Suisse Group AG to UBS Group AG had “significantly impacted the market’s expectations” for the economy.
“It has generated lots of anxieties in the market and will surely induce some tightening of financial conditions as banks and other lenders become more conservative,” he added in the letter. He wrote recently that consumer spending may slow.
Dimon advised the government not to overreact to the financial crisis by adding regulations.