Dimon: Bank rules should change after Silicon Valley Bank
JPMorgan’s Jamie Dimon is telling investors that government and banks should work to adjust industry regulations following the collapse of Silicon Valley Bank and Signature Bank last month
NEW YORK (AP) — JPMorgan CEO Jamie Dimon said the U.S. and the banking industry should amend regulations following the collapse of Silicon Valley Bank and Signature Bank last month, saying that the financial system needs to be adjusted so that one bank's failure does not “cause undue panic and financial harm.”
The comments, made in Dimon's letter to JPMorgan Chase shareholders Tuesday, were his first since the two banks failed. Dimon, the chairman and chief executive of the nation's largest bank, is a veteran of the 2008 financial crisis, and one of the last senior executives remaining at a Wall Street firm since the industry nearly collapsed 15 years ago.
Dimon said in his letter there was plenty of blame to go around for Silicon Valley Bank's failure. The bank's management poorly handled the bank's interest rate risk by buying low interest government bonds and mortgages, leaving it too exposed to the Federal Reserve's rising interest rates, he said. Regulators like the Fed did not adequately understand the risks in SVB's balance sheet soon enough to push the bank to adjust course before it was too late.
Lastly Dimon partially blamed venture capitalists and the tech community, whose collective decision to pull their money out of SVB caused the bank to fail through a traditional bank run.
