J.P.Morgan's Dimon says banking crisis nothing like 2008, but sees 'storm clouds' ahead

J.P. Morgan's boss did not believe that the recent banking crisis was anything like what was experienced in 2008.

Nonetheless, "we do have other unique and complicated issues in front of us" Jamie Dimon said in his annual letter to shareholders.

On the positive side of things, the veteran banker said that US consumers' balance sheets "were in great shape".

Dimon cited J.P.Morgan estimates by which consumers still had $1.2trn more of "excess cash" in their checking accounts than before the pandemic.

Furthermore, unemployment was "extremely low", wages were rising, especially among lower income households, and stocks as well as home prices had been appreicating for a decade.

Yet "while this is nothing like 2008, it is not clear when this current crisis will end," he added.

In particular, he highlighted how it was "unclear" whether the disruption from the failures of SVB and Credit Suisse would slow consumer spending.

He also saw multiple "storm clouds" ahead, which he grouped into those around "abnormal" quantitative tightening and fiscal spending, and those from war, the energy crisis, trade and China.

Among the former, he cited the large quantitative tightening "and other unknowns", which might reduce liquidity and trigger higher long-term interest rates.

There was also the possible risk of persistent inflation, which might require higher interest rates.

On the more geopolitical side of factors to contend with there was the unpredictable war, inflationary trade adjustments, economic alliances in flux, a potential for rising oil and gas prices and "huge" economic and geopolitical strains.