JPMorgan Chase & Co. CEO Jamie Dimon stated the current blowups of Silicon Valley Bank and Signature Bank have sparked a banking disaster that’s not but over.
But Dimon used his annual letter to shareholders to level out that the present challenges going through the banking system aren’t as unhealthy as they have been in 2008.
“This wasn’t the finest hour for many players,” Dimon stated in a piece of the letter entitled, “Banking Turmoil and Regulatory Goals.”
“The current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come,” Dimon stated. “But importantly, recent events are nothing like what occurred during the 2008 global financial crisis (which barely affected regional banks).”
Dimon’s feedback got here lower than a month after the Federal Deposit Insurance Corp. took management of Silicon Valley Bank on March 10 after a run on deposits.
While financial institution administration was not absolved by Dimon, he additionally stated the Federal Reserve’s speedy rise of rates of interest “placed heightened focus on the potential for rapid deterioration of the fair value of hold-to-maturity portfolios and, in this case, the lack of stickiness of certain uninsured deposits.”
Dimon stated the U.S. authorities additionally supplied an incentive for banks to personal “very safe government securities because they were considered highly liquid by regulators and carried very low capital requirements.”
On high of that, the Fed’s annual stress check for banks by no means included rates of interest at increased ranges, Dimon stated.
JPMorgan, together with The Federal Reserve, has supplied a backstop for First Republic Bank
FRC,
a big regional lender that has seen an outflow of deposits after Silicon Valley Bank.
JPMorgan Chase
JPM,
inventory is down 2.9% to this point in 2023, in comparison with a 7.4% improve by the S&P 500
SPX,
Source web site: www.marketwatch.com
