JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, asked about fierce competition across the financial industry, said he’s starting to see parallels to the era before the 2008 financial crisis, when a rush to make loans ended disastrously.
“Unfortunately, we did see this in ’05, ’06 and ’07, almost the same thing — the rising tide was lifting all boats, everyone was making a lot of money,” Dimon told investors on Monday. While JPMorgan isn’t willing to make riskier loans to boost net interest income, he said, “I see a couple people doing some dumb things. They’re just doing dumb things to create NII.”’
Dimon, who led the largest US bank through the 2008 financial crisis and scooped up two major competitors that collapsed, said he expects the credit cycle will eventually sour again — though he is not sure when. The CEO has been warning for months about the potential deterioration in credit quality. When auto lender Tricolor Holdings and car-parts supplier First Brands Group imploded last year, he said that seeing one “cockroach” meant more would likely crop up.
In recent weeks, various industries have confronted the artificial intelligence “scare trade,” as investors weigh how the new technology could disrupt markets.
“There’s always a surprise in a credit cycle,” Dimon said, adding that the surprise has often been which industry. “This time around it might be software because of AI.”
While that may prompt JPMorgan to scrutinize certain lending, Dimon expressed doubt it would h