WASHINGTON, Sep 28 (Businesshala) – JPMorgan Chase & Company (JPM.N) has begun preparations for the possibility of the United States hitting its debt limit, chief executive Jamie Dimon told Businesshala on Tuesday, then He also expected policy makers to find solutions. To avoid that “potentially catastrophic” event.
Dimon said in an interview that the country’s largest lender has begun scenario-planning how a potential US credit default will affect the repo and money markets, client contracts, its capital ratio and ratings agencies’ response.
“This is the third time we’ve had to do this, it’s a potentially catastrophic event,” he said.
“Every time it comes up, it’s okay, but we should never get close to it. I think this whole thing is wrong and one day we should just have a bipartisan bill and get rid of the debt ceiling.” Should get it. It’s all politics,” he added.
Congressional Democrats are scrambling to find a way to raise the government’s $28.4-trillion borrowing cap before the Treasury Department runs out of ways to pay off the nation’s debt. Treasury Secretary Janet Yellen has said the Treasury will end the extraordinary measures by October 18.
Democrats had hoped to avoid a partial government shutdown and suspend the federal debt limit with one vote. But Republicans blocked him in the Senate on Monday, who said the two cases should be dealt with separately.
The fiscal crunch of US politics has become a regular feature over the past decade due to ongoing partisan polarization, with debt limit deals coming to the wire in 2011 and 2017.
Dimon said the bank was exploring through its customer contracts, a resource-intensive process, as part of its preparations.
“You have to check the contracts to estimate it… If I remember correctly, it cost us $100 million the last time we pitched it,” he said.
Dimon was speaking to Businesshala ahead of a ribbon-cutting ceremony at the bank’s new branch in southeast Washington, which was part of JPMorgan’s effort to promote racial equity by increasing its presence in underserved communities.
This branch is the eleventh of its kind. JPMorgan has opened in cities including New York, Detroit, Los Angeles and Chicago since 2019. As well as providing traditional services, the branches work with local community groups to provide free skills training and other small-scale activities. business support.
“This is not a traditional bank branch, we want it to be very welcoming, we want it to be attractive,” Dimon said.
Following nationwide “Black Lives Matter” protests last year, JPMorgan pledged $30 billion over five years to advance racial equity. This includes 40,000 new mortgages and 15,000 small business loans to black and Latino communities.
The investment underscores how large corporations are increasingly adapting to social, environmental and governance or ESG issues amidst investor pressure.
Addressing racial equality is also a priority for the administration of President Joe Biden, which has said bank branch “desert” perpetuates inequality by reducing access to loans.
Biden’s acting Comptroller of the Currency Michael Hsu said this month that he would put an end to controversial changes to fair loan laws led by his Trump-appointed predecessor and launch a new review with other banking regulators.
The rules around the Community Reinvestment Act, where regulators score banks on how well they serve poor communities, need to be regularly modernized to account for technology-driven changes in banking, said Dimon, who added that The overall law is good for the country.
“It’s too complicated, too slow, too late, too hard to measure,” he said, adding that CRA assessments also need to be done in real time, as opposed to a retrospective review every few years.
“Does it really capture everything? No. Is it real time? No. Is it politicized? Absolutely.”