The turmoil in the financial industry caused by the collapse of Silicon Valley Bank (SVB) is not over yet and will be felt for years, believes JPMorgan Chase CEO Jamie Dimon.
The banker said in his annual letter to shareholders on Tuesday that this turn of events has “significantly changed the market’s expectations, bond prices have recovered dramatically, the stock market is down and the market’s odds of a recession have increased.”
While noting that recent events are nothing like what occurred during the 2008 global financial crisis, Dimon warned that “the current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come.”
The recent crisis has “provoked lots of jitters in the market and will clearly cause some tightening of financial conditions as banks and other lenders become more conservative,” according to the JPMorgan chief.
“Any crisis that damages Americans’ trust in their banks damages all banks – a fact that was known even before this crisis. While it is true that this bank crisis ‘benefited’ larger banks due to the inflow of deposits they received from smaller institutions, the notion that this meltdown was good for them in any way is absurd,” Dimon wrote.