Jamie Dimon, CEO of JPMorgan. AP-Yonhap
Jamie Dimon, chief executive of JPMorgan, the largest U.S. bank, issued another warning about troubles in the credit lending market.
Speaking at an investment management conference in Norway on Tuesday, Dimon said the contraction in the credit lending market could be more severe than expected, according to Bloomberg. “There are more than 1,000 firms operating in the private credit space, and it’s difficult for all of them to perform well during a recession,” Dimon said. “Some may do well, but not all 1,000 firms will.” He added, “It won’t be a terrible situation, but since there hasn’t been a credit crunch for a long time, private credit will be worse than people think. The same could apply to some banks.”
Dimon has been actively flagging problems in private credit, starting with his remark on October 14 last year that “when you see one cockroach, there are probably more.” At an earnings conference on the 14th of this month, he offered a more measured assessment, saying, “This is not a systemic issue. There may be some pain, but it’s not a level to be particularly worried about.”
On geopolitical risks including the Middle East war, Dimon said, “They are adding to upward pressure on prices, but I’m not worried about inflation right now.” He added, “There are many factors that could stoke inflation, including the war with Iran, global rearmament, infrastructure demand, and fiscal deficits.”