Jamie Dimon, CEO of JPMorgan, the largest US bank by assets, warned of the continuing repercussions of the banking crisis for years, stressing that the crisis is not over yet, and at the same time calling on the authorities not to exaggerate in imposing more restrictions on the banking sector.

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EDITED BY | ANNA SAM

ECONOMIC SECTION

5 APRIL 2023 - USA

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    In his annual letter to the bank's shareholders, which always attracts the attention of business and financial circles, Dimon said today, Tuesday, that "American regulations encouraged practices that caused fatal errors in Silicon Valley Bank, and that the Federal Reserve (US Central Bank) did not test the safety of These practices, which almost disappeared among the usual dealings of the sector until depositors became concerned and Wall Street took notice.

Despite the decline in intensity in his talk about the rules governing the work of banks in America, Dimon criticized the Fed's delay in conducting stress tests for banks, including their stock of fixed-return Treasury bonds, in the event of high-interest rates.

“Ironically, banks were seeking to own low-risk government bonds because they were considered highly liquid by regulators, and therefore have very low capital requirements,” Dimon said, stressing that some did not realize that high-interest rates would cause huge losses to holders of those bonds, if What they wanted to sell.

"These conflicting factors became crucial when the market, rating agencies, and depositors focused on them," he added.

Dimon, 67, has chaired JPMorgan since 2005 and is now the only CEO of a major bank remaining in office after the 2008 financial crisis, and is the most prominent figure in the US banking sector. His annual message is analyzed by bankers, stock exchange dealers, and investors, as a prelude, in most cases, to what is expected to happen during the coming period, in the largest economy in the world.