JPMorgan's CEO Jamie Dimon says a recession is more likely due to the banking crisis

In the wake of the banking crisis, Jamie Dimon has stated that a US recession is more likely in the coming years as lenders tighten credit.

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"We're seeing people cut back a little bit on lending, cut back a little bit on spending, and pull backs a little bit," JPMorgan Chase & Co. CEO Jamie Dimon said in an interview with Trade Algo. It is true that turmoil in the industry may not necessarily cause a recession, but "it is recessionary in nature."

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Simon's remarks build on an assessment he gave in his annual letter earlier this week to shareholders, where he acknowledged, in addition to the collapse of Silicon Valley Bank and the emergency sale of Credit Suisse Group AG to UBS Group AG, that the "expectations of the market had been significantly altered."

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"This has caused many jitters in the market and is likely to cause some tightening of financial conditions as banks and other lenders become more conservative as a result," he said in his letter. Just a few days ago, he wrote in his blog that it was unclear whether consumer spending is likely to slow down.

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The 67-year-old CEO of JPMorgan has been in charge of the bank since 2005 and is currently the only big bank CEO to survive the 2008 financial crisis still at the helm.

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As he says in his annual letter, the government should not "overreact" to the financial crisis by imposing more regulations on the banking industry in response to the crisis.

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Since the run on deposits at SVB and several other regional banks in the United States occurred, regional banks have been in turmoil. There was a sudden surge in customer withdrawals which forced some of them to sell off assets at a loss as a result of rising interest rates depressing the value of the bonds they purchased when interest rates were low. 

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As Dimon pointed out in his letter, banks are encouraged to purchase low-yielding government securities because these securities are considered to be highly liquid by regulators.