The US banking crisis is far from over, says JP Morgan Chase boss

The US banking crisis is ongoing and according to Jamie Dimon, head of JP Morgan Chase, will last for years.

“The current crisis is not over yet, and even if it is behind us, it will still have an impact for years to come,” writes the Wall Street veteran in his 43-page annual letter to shareholders.

Storm clouds are still threatening the economy, he added. And the banking system is under renewed pressure after the failure of Silicon Valley Bank and UBS’s rescue of Credit Suisse last month.

JP Morgan Chase chief Jamie Dimon said the market’s chances of a recession have increased

“The market’s odds of a recession have increased,” Dimon wrote.

“And while this isn’t like 2008, it’s not clear when this current crisis will end. It has created a lot of jitters in the market and will clearly result in some tightening of funding conditions as banks and other lenders become more conservative.’

And in an attack on regulators, the 67-year-old said the risks that led to the current crisis were “hidden from plain sight”.

Dimon said the rules encouraged banks to accumulate large portfolios of US Treasuries — or government bonds — which fell in value when the Federal Reserve raised interest rates.

This caused the banks to suffer huge losses, which scared investors.

He opposed the Fed, saying that stress tests of the banking system “never included interest rates at higher levels.”