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“We are seeing people reduce lending a little bit, cut back a little bit and pull back a little bit,” the JPMorgan (NYSE:JPM), Chase & Co. chief executive officer said in an interview with CNN. Turmoil in the industry won’t necessarily force a recession, he said, but “it is recessionary.”
Dimon’s remarks build on an assessment he offered in an annual letter to shareholders earlier this week, in which he acknowledged that the collapse of Silicon Valley Bank and the emergency sale of Credit Suisse Group AG to UBS Group AG (SIX:UBSG) had “significantly changed the market’s expectations.”
“It has provoked lots of jitters in the market and will clearly cause some tightening of financial conditions as banks and other lenders become more conservative,” he said in the letter. Unclear, he wrote just days ago, is whether consumer spending may slow.
Dimon, 67, has run JPMorgan since 2005, and is the only CEO from the 2008 financial crisis still in charge of a big bank.
He said in the annual letter that the government shouldn’t “overreact” to the banking crisis by imposing more rules on the industry.
US regional banks have been in turmoil after a run on deposits struck SVB and several other lenders. Rising interest rates depressed the value of bonds they bought when interest rates were low, and a sudden surge in customer withdrawals forced some of them to sell those assets at a loss.
Dimon said in the letter that regulators encouraged banks to purchase low-yielding government securities because they were considered highly liquid.
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