'Other problems might be lurking': Strategist is unconvinced by Jamie Dimon's bank crisis comments
JPMorgan Chase CEO Jamie Dimon's assertion that recent turmoil in the banking sector was effectively ended by the resolution of First Republic may be premature, one analyst suggested.
The Wall Street giant won a weekend auction for the embattled regional lender after it was seized by the California Department of Financial Protection and Innovation, and will acquire nearly all of its deposits and a majority of assets.
First Republic's demise marked the third of its kind among midsized banks since the sudden collapse of Silicon Valley Bank and Signature Bank in early March. This triggered a global crisis of confidence that eventually pushed Swiss stalwart Credit Suisse to the brink, prompting an emergency rescue by domestic rival UBS.
«There are only so many banks that were offsides this way,» Dimon told analysts in a call shortly after the First Republic deal was announced.
«There may be another smaller one, but this pretty much resolves them all,» Dimon said. «This part of the crisis is over.»
The recent financial instability has added another troubling consideration for central banks, which have been hiking interest rates aggressively to curb inflation, exposing some of the mismanaged positions held by certain banks that did not expect financial conditions to tighten so sharply.
The U.S. Federal Reserve will announce its latest monetary policy decision on Wednesday, and several of the central bank's policymakers have reiterated their focus on dragging inflation back down to Earth even if it means tipping the economy into recession.
David Pierce, director of strategic initiatives at Utah-based GPS Capital Markets, told CNBC Tuesday that the financial sector's frailties may be more profound than the messaging from bankers
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