Jp Morgan alarm, risk of losses on loans to private individuals

Agile credit losses al private sector they may be larger than expected. This is the alarm raised by the CEO of Jp Morgan Jamie Dimon in the annual letter to shareholders and reported by the Financial Times. The manager, one of the most influential voices on Wall Street, calls into question a weakening of loan granting criteria while concerns about the health of the private credit sector. For Dimon, the ‘red’ paid by the financiers of highly indebted companies will be higher than estimated. “This is because the credit standards have weakened slightly virtually across the board,” wrote Dimon, who has led JPMorgan since 2006. He cited, among the causes behind this trend, “aggressive and positive hypotheses about future performance” in the evaluation of borrowers, weaker contractual clauses and greater use of payment in kind (PIK)in which borrowers delay repaying loans.

Last year it was Dimon who introduced the term “cockroaches” to indicate i failures which have shaken the world of finance. In the letter to shareholders, Dimon stressed that the industry “has not had a credit recession for a long time, and it seems like some people take it for granted that it will never happen.” But this could happen.

The US economy and stimulus

Referring to theUS economy overall, Dimon said “it continues to be resilientcon i consumers who continue to earn and spend” despite a “disturbing panorama” and “a recent weakening”. But, he underlined, there is the potential for “significant continuous shocks in oil and raw material prices” because of war in Iran. As a stimulus to the economy, the manager pointed to the president’s One Big Beautiful Bill Act Donald Trumpthe agenda of deregulation of the White House, the bond-buying program of the Federal Reserve and the expense for them AI infrastructures.

Foreign policy and Europe

As for the foreign policyDimon cited the Old Continent noting that the United States “needs theEuropa succeed”, but that at the same time “Europe is entering a decisive decade and is unable to act”. “Europe has never completed theeconomic union“, he pointed out, “which has caused European countries to consistently record economic results below expectations.”