The banking crisis has made it more likely that there will be a recession 2023

Jamie Dimon, the chief executive officer of JPMorgan Chase & Co, stated that the US bank crisis that shook global markets last month is likely nearing its conclusion, even if more unforeseen failures occur.

Dimon told CNN in an interview on Thursday that only a handful of lenders have the problems that brought down Silicon Valley Bank, and when the industry begins reporting quarterly earnings the following week, the figures will likely be positive. When asked if additional bank failures were possible, he responded that he did not know.

Dimon stated, “But if there are, I am confident they will be resolved and this will likely be the last one.” I believe we are nearing the conclusion of this particular calamity.

Since 2005, Dimon, 67, has led JPMorgan, and he is the only CEO from the 2008 financial crisis still in command of a major bank. In a CNN report published earlier on Thursday, he stated that the recent turmoil in the financial sector has likely increased the likelihood of a U.S. recession, though one is not inevitable.

“People are reducing their lending, cutting back, and pulling back a little bit,”

Regional banks in the United States have been in turmoil since a run on deposits hit SVB and several other lenders. Rising interest rates diminished the value of bonds they purchased when rates were low, and an abrupt influx of customer withdrawals compelled some of them to sell these assets at a loss.

In an annual letter to shareholders earlier this week, Dimon acknowledged that the collapse of Silicon Valley Bank and the emergency sale of Credit Suisse Group AG to UBS Group AG had “significantly altered the market’s expectations” for the economy. Dimon’s remarks expand on that assessment.

In the letter, he stated, “It has caused a great deal of market anxiety and will undoubtedly lead to a tightening of financial conditions as banks and other lenders become more cautious.” He wrote just days ago that it is unclear whether consumer spending will decline.
Dimon stated that the government should not overreact to the banking crisis by imposing additional regulations on the industry.

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