The banking crisis does raise the risk of recession, JPMorgan Chase & Co. JPM, -0.11% Chief Executive Jamie Dimon said Thursday, though he’s confident the situation will be resolved.
In an interview aired Thursday night on “CNN PrimeTime,” Dimon said the banking industry’s current woes are “like another weight on the scale” toward a recession. “It won’t necessarily force recession, but it is recessionary,” he said.
But Dimon stressed the situation is different than the events that led to the Great Recession, and is confident the current crisis will be resolved. “This is not 2008. OK? This is a much more limited — there are only a handful of banks that had this particular problem,” he told CNN’s Poppy Harlow, according to a CNN transcript. “They’ll eventually be resolved one way or another and I think then people should take a deep breath.”
“ “I think we’re getting near the end of this particular crisis.” ”
“I think we’re getting near the end of this particular crisis,” Dimon added, noting important differences from the last financial crisis. “Remember, in ’08, it was hundreds of institutions around the world, far too much leverage; we don’t have that. Huge problems in mortgage markets; we don’t have that. This is nothing like that. And the American public shouldn’t think that.”
In his annual letter to shareholders on Tuesday, Dimon warned the banking turmoil would lead to repercussions “for years to come.” On Thursday, Dimon clarified his comments: “I think those repercussions are regulatory… I acknowledge, obviously when you have a problem, things need to change. But you know, I’m begging the regulators, just take a deep breath.”
While warning of storm clouds ahead for the economy — citing risk factors such as quantitative tightening, high inflation and the war in Ukraine — Dimon also expressed optimism that America will emerge stronger from “whatever we go through in the next couple years.”
“The health of America is the strength of its people. It’s human capital. It is brain power, its capability, its capital markets,” he said. “That’s at the heart of America, and that’s still there. That has not gone away.”
The second part of Dimon’s interview will air Friday on “CNN This Morning.”