Sunday, October 24, 2021

JPMorgan’s Dimon warns that a US default would be ‘potentially disastrous’

WASHINGTON — JPMorgan Chase & Co. has begun preparations for the possibility of the United States hitting its debt limit, chief executive Jamie Dimon told Reuters on Tuesday, yet he urged policymakers to take that “potentially disastrous” event. Hoping to find a solution to avoid .

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 out, it’s fine, 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 a debt slew. The border should get rid of it. It’s all politics,” he said.

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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 means to service the nation’s debt. Treasury Secretary Janet Yellen has said the Treasury will end the extraordinary measures by October 18.

Fiscal brittleness has become a regular feature of American politics over the past decade, with debt limit deals coming on strings in 2011 and 2017 due to ongoing partisan polarization.

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, the last time we were drawn to it, it cost us $100 million,” he said.

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This News Originally From – The Epoch Times

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