The banking crisis has made a recession more likely in USA faced with a credit tightening by lenders, said Jamie Dimon.
“We’re seeing people reduce lending a little bit, cut back a little bit and retire a little bit,” said the chief executive of JPMorgan, Chase & Co. in an interview with CNN. The crisis in the sector will not necessarily force a recession, she pointed out, but “it is recessive”.
The comments of Dimon are based on an assessment he offered earlier this week in an annual letter to shareholders.in which he acknowledged that the collapse of Silicon Valley Bank and the emergency sale of Credit Suisse Group AG a UBS Group AG they had “significantly changed market expectations”.
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“It has caused a lot of nervousness in the market and will no doubt cause some tightening of financial conditions as banks and other lenders become more conservative,” he said in the letter. He wrote a few days ago that it’s not clear whether consumer spending is likely to slow.
Dimon, 67, has directedJPMorgan since 2005and he is the only CEO since the 2008 financial crisis still in charge of a large bank.
In the annual letter, indicated that the government should not “overreact” to the banking crisis by imposing more regulations on the industry.
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The regional banks of USA have been in crisis after a bank run hit SVB and several other lenders. Rising interest rates reduced the value of the bonds they bought when interest rates were low, and a sudden increase in customer withdrawals forced some of them to sell those assets at a loss.
Dimon said in the letter that regulators they encouraged the banks to buy low-yielding government securities because their liquidity was considered to be high.
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