Annual Letter to Shareholders Warning
“The current system cannot prevent bankruptcy.
Need to research why the crisis happened
It’s not like the 2008 financial crisis.”
Since 2005, JP Morgan CEO Jamie Dimon (CEO, 67, photo), who has been leading JP Morgan Chase, the largest bank in the United States, and is called the “Wall Street Emperor” for exerting a powerful influence on the global financial world, is the CEO of Silicon Valley Bank (SVB), a small and medium-sized US bank. Regarding the banking crisis triggered by the bankruptcy, “It is not over yet. It will continue for at least several years,” he warned on the 4th (local time). In the aftermath, the share price of another small and medium-sized bank, First Republic Bank, which is in crisis, also fell 5.6% on the day, and major financial stocks also showed weakness.
“Even if the banking crisis appears to have passed, the adverse effects will linger for years to come,” Dimon said in his 43-page annual letter to shareholders. He predicted that it is uncertain when the current crisis will end and that high inflation will continue, and that “if inflation continues, the US central bank, the Federal Reserve, will have no choice but to raise the benchmark interest rate even in the banking crisis.”
He argued that unconditionally strengthening regulations to cope with the banking crisis is not a solution. “It is important to note that the regulatory, supervisory and settlement mechanisms currently in place have not prevented SVB and Signature Bank from bankruptcy,” said Dimon. do,” he insisted. We need to study why the current crisis has occurred, but insisted that we should not overreact.
Regarding the analysis that only a few large banks benefited from the fact that customers who had entrusted their money to small and medium-sized banks switched to large banks such as JP Morgan due to this crisis, it was “absurd idea” and all banks were hit by a decline in confidence in the industry as a whole. was diagnosed
CEO Dimon said that it is unlikely that the crisis will turn into a major crisis like the 2008 global financial crisis, and that it is uncertain whether it will lead to a decrease in ‘consumer spending’, which accounts for about two-thirds of the US economy. He commented, “Unlike 2008, when large financial companies, mortgage companies, and insurance companies were connected and collapsed together, there are far fewer financial companies involved and problems to be solved in this banking crisis.”
CEO Dimon contributed to the evolution of the financial crisis by acquiring Bear Stearns and Washington Mutual, which were in crisis at the time in 2008. Last month, he also played a leading role in supporting 30 billion dollars for the First Republic, which was called the ‘second SVB’ by 11 large financial companies, including JP Morgan. However, suspicions that he protected famous sex offender Jeffrey Epstein have recently surfaced, and some are also discussing the possibility that he will resign sooner or later.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.