29 Sept 2021
JP Morgan’s CEO Warns of Catastrophic Outcome if U.S Defaults
The Index Today
Chief Executive at JP Morgan Chase & Co, Jamie Dimon, has told reporters that policymakers should work towards a solution to avoid reaching the debt limit which will undoubtedly have catastrophic effects. The organization has already begin preparations to tackle the worst likely scenario.
JP Morgan Chase & Co has experts working on scenario-planning for potential U.S credit default which would ultimately effect client contracts, capital ratios, money markets and ratings.
Jamie Dimon continued saying that, “This is like the third time we’ve had to do this, it is a potentially catastrophic event. Every single time this comes up, it gets fixed, but we should never ever get this close. I just think this whole thing is mistaken and one day we should just have a bipartisan bill and get rid of the debt ceiling. It’s all politics.”
Democrats are busy finding a way to increase the government’s borrowing ceiling before the Treasury runs out. The current borrowing cap remains at $28.4 trillion and will likely become exhausted in the following months.
Due to the on-going monetary and fiscal escapade combined with partisan polarization, debt ceilings have been on a decline in past years. Banks must go through its contracts with clients which is time-consuming and resource-intensive. Dimon said, “You’ve got to check the contracts to try to predict it out…if I remember correctly, the last time we got prepared for this, it cost us $100 million.”
JP Morgan has opened up in cities across the nation and has been providing a range of services including free skills training to people and small-business support. The organization has pledged over $30 billion in the past towards racial inequality.