He says the next financial crisis should see “more volatile” markets and a “rapid decline in valuations” because regulators have hamstrung the banks.
In his annual letter to shareholders, Dimon said recent schisms in Treasury and currency markets were a “warning shot across the bow”.
He devoted three pages to a “thought exercise” on what might happen in the next crisis, warning that the ability of JPMorgan and other banks to act as shock absorbers had been dramatically hindered by new capital and liquidity rules.
He said that, unlike in 2008 when JPMorgan attracted $100bn of deposits from weaker competitors, it was “unlikely that we would want to accept new deposits the next time around”.
Dimon added that non-bank lenders, which have taken over parts of the market previously occupied by banks, would “not continue rolling over loans or extending new credit except at exorbitant prices that take advantage of the crisis situation”.
-RW
To refer to the too-big-to-fail, bailed-out banks as shock absorbers is mind-boggling.
ReplyDelete"He says the next financial crisis should see “more volatile” markets and a “rapid decline in valuations” because regulators have hamstrung the banks"
ReplyDeleteFederal regulations- bad. Federal bail outs- good
Dimon added that non-bank lenders, which have taken over parts of the market previously occupied by banks, would “not continue rolling over loans or extending new credit except at exorbitant prices that take advantage of the crisis situation”.
Competition - bad, cartelism - good.