Money & The Economy

JPMorgan Boss Warns That Banking Crisis Will Have Consequences ‘For Years To Come’

JPMorgan Chase CEO Jamie Dimon said in his annual shareholder letter Tuesday that the current fallout from the bank failures of Silicon Valley Bank (SVB) and Signature Bank would likely continue for years.

“As I write this letter, the current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come,” wrote Dimon. However, in comparison to 2008, Dimon said the 2023 crisis “involves far fewer financial players and fewer issues that need to be resolved.”

SVB’s collapse is the second-largest bank failure in American history, and the bank’s depositors, along with those of Signature Bank, were bailed out by the federal government in March.

Dimon also acknowledged that while many depositors moved their money from smaller banks to bigger ones, financial titans did not benefit. He described that as an “absurd” notion, writing that “any crisis that damages Americans’ trust in their banks damages all banks – a fact that was known even before this crisis.”

America’s 25 largest banks gained $120 billion in deposits following the collapse, and subsequent depositor bailout, of SVB and Signature, while deposits at smaller banks fell by $108 billion, according to The Wall Street Journal.

The CEO also took on political issues in his letter, writing about his frustration with some of his fellow Americans who will not “consider sensible policy measures like a carbon tax to stem climate change.”

Two women who state that Jeffrey Epstein sexually assaulted them filed lawsuits in November accusing JPMorgan and Deutsche Bank of enabling his purported sex trafficking operation, Reuters reported. On Monday, the banks will face lawsuits for allegedly purposely ignoring Epstein’s wrongdoing due to him being a valued client.

Dimon will be questioned on this under oath in May, Reuters reported.

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