Dimon said preparations for JPMorgan Chase include reviews of how credit agencies will respond
JPMorgan Chase CEO Jamie Dimon warned on Tuesday that US defaults on outstanding debt obligations would have disastrous consequences for the economy.
JPMorgan Chase has begun running scenarios predicting the effects of a default if lawmakers fail to suspend borrowing limits before a certain deadline. Dimon told Reuters A default would be a “potentially catastrophic event,” it said, adding that Congress should eventually vote to eliminate the debt limit entirely.
“Every time it comes up, it’s okay, but we should never get close to it. I think this whole thing is wrong, and one day we should just have a bipartisan bill and get rid of the debt ceiling.” Gotta get it. That’s all politics,” Dimon said in the interview.
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While debt-limit increases are generally regular business on Capitol Hill, talks between Republicans and Democrats over suspending the limit have broken down in recent days amid disagreements over President Biden’s legislative agenda. Treasury Secretary Janet Yellen said US cash reserves would run out by October 18.
Earlier this week, Republican lawmakers stopped considering a Democrat-backed bill that tied debt limit increases to halt government funding and hurricane relief. Without the extension, the US government would default on its outstanding debt obligations for the first time in history.
Dimon said JPMorgan Chase’s preparations include a review of how credit agencies will respond to a default, as well as the potential impact on its client contracts.
“If I remember correctly, the last time we were drawn to it, it cost us $100 million,” Dimon said.