Storm clouds continue to threaten the economy just like a year ago, said Dimon, the head of the largest US lender. And the banking system is under new stress after the failure of UBS’s bailout of Silicon Valley Bank and Credit Suisse last month.
“The odds of a market downturn have increased,” Dimon wrote. “And while this is nothing like 2008, it is unclear when the current crisis will end. It has caused a lot of market jitters and will clearly cause a tailor-made tightening of financial conditions.”
The risks that led to the current crisis were “hiding in plain sight,” Dimon wrote, citing interest rate exposure and the level of uninsured deposits at Silicon Valley Bank.
After taking the helm at JPMorgan in 2006, Dimon presided over the acquisitions of Bear Stearns during the financial crisis and then of Washington Mutual, the savings and loan bank that carried out the largest bankruptcy in US history.