CEO Watch Dimon: Credit Crisis Could Worsen
"I do think we have some very serious issues to face," said Dimon, according to Reuters. "Things could actually get worse."
The credit crisis has eased a bit but still could deteriorate, according to J.P. Morgan Chase C.E.O. Jamie Dimon, who spoke at the Federal Deposit Insurance Corp. conference in Arlington, Va.
"I do think we have some very serious issues to face," said Dimon, according to Reuters. "Things could actually get worse."
Dimon lauded the U.S. regulatory system's response to the credit crisis, but he warned that no institution is safe from potential failure, including big banks. In particular, he praised Treasury Secretary Henry Paulson for his plans to overhaul the nation's regulatory system.
Paulson and Fed chairman Ben Bernanke have called for the Federal Reserve to be given more power to battle widespread financial turmoil.
"I think the government is taking proper, in my opinion, monetary and fiscal policy at this point," Dimon told Reuters.
In March, the Federal Reserve helped J.P. Morgan orchestrate a takeover of Bear Stearns by facilitating a $29 billion loan to complete the transaction, a move triggered by fear that a Bear Stearns collapse could have spurred widespread financial panic.
"There was no question that the right thing was done," said Dimon, according to BusinessWeek. Dimon added that a Bear Stearns bankruptcy could have been a "catastrophe."
Critics say the Fed facilitated a fire-sale of the nation's then fifth-largest bank – a bailout that has placed billions of taxpayer dollars at risk.
Dimon concluded by saying that commercial and regional banks could be the next institutions to face significant stress as the U.S. economy continues to flounder.
