JPMorgan has begun to prepare for potential US default, CEO says

JPMorgan has begun to prepare for potential US default, CEO says
JPMorgan Chase & Co (JPM.N) Chief Executive Jamie Dimon. Source: Reuters
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Daily US Times: The CEO of America’s largest bank JPMorgan Chase, Jamie Dimon said that his bank is once again preparing for a potential US default even though he expects Congress to avoid that “potentially catastrophic” incident by lifting the debt ceiling.

Dimon said JPMorgan has begun scenario-planning for how a possible default would affect client contracts, financial markets, capital ratios and America’s credit ratings, he said in an interview with Reuters on Tuesday.

That’s something the CEO has indicated the bank did during previous close calls with the debt ceiling.

In the Reuters interview, Dimon said: “Every single time this comes up, it gets fixed, but we should never even 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.”

On Tuesday, Treasury Secretary Janet Yellen said lawmakers that the federal government will run out of cash and extraordinary measures by October 18, setting the stage for a potential default if Congress doesn’t raise the debt limit before then.

Jamie Dimon said JPMorgan is combing through client contracts to prepare for a potential default, adding that “If I remember correctly, the last time we got prepared for this, it cost us $100 million.”

The bank declined to comment further.

During a hearing earlier this year, the JPMorgan Chase CEO said that during previous debt ceiling debates the bank spent time and money investigating what a US default might mean.

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