How long will the American banking crisis last?

According to Iran Economist, citing Rasha, this banker said in his annual letter to shareholders that this turmoil has significantly changed market expectations, bond prices have improved dramatically, the stock market has fallen and there is a possibility of market stagnation. Increased.

While pointing out that recent events are nothing like the financial events during the global financial crisis in 2008, Dimon warned that the current crisis is not over yet, and even when it is over, there will be consequences for years to come.

According to JPMorgan’s chairman, the recent crisis has provoked a lot of irritation in the market and will clearly tighten financial conditions as banks and other lenders become more conservative.

In early March, massive deposits caused Silicon Valley and Signature Bank to fail within days. The third lender, First Republic, was eventually saved by receiving $30 billion in deposits from major Wall Street banks, including JP Morgan.

Big lenders stepped in amid investor fears that First Republic could become the next US bank to fail, then spread to Europe, where Credit Suisse struggled and was eventually taken over by rival UBS in a The hasty transaction was brought under control with the mediation of the central bank of this country.

According to Dimon, the pressure on regional banks has led investors and analysts to believe that larger banks will benefit from the crisis rather than fail.

He said JPMorgan wants to strengthen smaller banks for the benefit of the entire financial system.

Any crisis that hurts Americans’ trust in their banks hurts all banks, a fact that was known even before this crisis. While it is true that the banking crisis benefited the larger banks due to the influx of deposits from smaller institutions, it is absurd to think that the collapse was in any way good for them.

He calls for more regulations in the financial sector and claimed that policymakers should be more careful about the potential pressure of some financial services on non-banks and so-called shadow banks.