JPMorgan Chase said Tuesday that it had begun to prepare for the possibility that the United States might hit its debt limit. However, he stated that he expected policymakers to find a way to prevent this “potentially devastating” event. Dimon, the country’s biggest lender, said that scenario-planning has been underway for how a possible U.S. credit default might affect the repo, money markets, client contracts and capital ratios. He also discussed how rating agencies would react.
“This would be the third time that we have to do it, and it could prove to be a catastrophic event,” he stated.
” Every time this happens, it is fixed. But we shouldn’t even get that close. This whole thing is a mistake. I think we should have a bipartisan bill to eliminate the debt ceiling. He added that it was all politics.
” We shouldn’t even get that close… One day, we should have a bipartisan bill to eliminate the debt ceiling. It’s all politics. “
Congressional Democrats are scrambling to find a way to raise the government’s $28.4-trillion borrowing cap before the Treasury Department runs out of ways to service the nation’s debt. Janet Yellen, Treasury Secretary, has stated that the Treasury will likely exhaust all extraordinary measures by October. 18.
Democrats hoped to avoid a partial shutdown of government and to suspend the federal borrowing ceiling with one vote. They were stopped Monday by the Senate by Republicans who stated that the two issues should be handled separately.
Fiscal brinkmanship is a common feature of U.S. politics in the last decade. This has been due to ongoing partisanpolarization with debt ceiling deals going down to the wire 2011, and 2017..
Dimon stated that the bank was going through client-contracts as part of preparation. This is a time-consuming process.
” You have to look at the contracts in order to be able to predict it. He said that $100million was the cost of getting prepared for this event the last time it happened.
Dimon spoke to Reuters prior to a ribbon-cutting ceremony at Chase’s new branch located in southeast Washington. This was part of Chase’s efforts to promote racial equality by increasing its presence in underserved areas.
This branch is the 11th in its type that Chase has opened in major cities like New York, Detroit and Los Angeles. The branches offer traditional services but also work with local community groups to provide small-business support and skills training.
” “It’s not an ordinary bank branch. We want it to feel welcoming and attractive.
Chase has pledged $30 $ billion over five years in support of racial equity. This follows the nationwide “Black Lives Matter!” protests. That includes originating 40,000 new mortgages and 15,000 small business loans to Black and Latino communities. The investment demonstrates how large corporations are becoming more aware of social, environmental, and governance issues. This is despite pressure from investors.
Addressing racial equity is also a priority for President Joe Biden’s administration, which has said bank branch “deserts” perpetuate inequality by reducing access to credit.