JPMorgan Chase chief executive officer Jamie Dimon said he expects the economic fallout from the coronavirus pandemic to include a bad recession and strain the financial system in ways similar to the 2008 financial crisis.
In his annual letter to shareholders, Dimon said the largest bank in the U.S. was entering the crisis from a position of strength but the pandemic presented challenges that were “dramatically different” from those imagined in the Federal Reserve stress tests.
“After the crisis subsides (and it will), our country should thoroughly review all aspects of our preparedness and response,” Dimon said. “And we should use the opportunity to closely review the economic response and determine whether any additional regulatory changes are warranted to improve our financial and economic system. There will be a time and place for that — but not now.”
Dimon said the bank would consider suspending its dividend in the event of an “extremely adverse” downturn in the U.S. economy. He said the bank’s earnings would be “down meaningfully in 2020.”
He believes the U.S. should have had a “pandemic playbook” to respond to the crisis and called for nonpartisan solutions going forward.
The bank will participate in government programs to address the economic challenges posed by the crisis but it would not request any regulatory relief.
Dimon has been working remotely since returning to work following a procedure to repair a tear in his aorta. The bank announced on March 5 that he had checked into a hospital after experiencing chest pains and had undergone emergency heart surgery. Daniel Pinto and Gordon Smith ran the company while Dimon was recuperating.
The bank has more than 180,000 employees working from home and has kept three quarters of its bank branches open during the crisis, according to the letter. It is also waving some fees and offering grace periods for mortgage and auto-loan payments.
MANDEL NGAN/AFP via Getty Images