According to Jamie Dimon, the current situation of the financial industry is not optimistic. The banker notes similarities with the period before the 2008 financial crisis, when mass lending ended in disaster.
“Unfortunately, we saw it in 2005, 2006 and 2007, almost the same thing – a rising tide lifted all boats, everyone made a lot of money,” Dimon said during a meeting with investors on Monday, as quoted by Bloomberg. He also noted that many banks are now willing to make riskier loans in order to increase net interest income [NII].
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The legendary banker warns of a major crisis. “They do stupid things”
“I see people doing stupid things. They're doing stupid things to create NII,” said Dimon, who ran JPMorgan Chase & Co. during the greatest financial crisis in recent years. In his opinion, the credit cycle will deteriorate again. However, he did not indicate exactly when this might happen.
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CEO of JPMorgan Chase & Co. bank has been warning about the possible deterioration of the situation for many months. He mentioned this when auto lending company Tricolor Holdings and auto parts supplier First Brands Group went bankrupt last year.
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Dimon also admitted that artificial intelligence has recently been a major concern in the markets. Investors are afraid of how it will affect their situation. However, he emphasized that he was calm about the fate of his bank.
