Finally, he reflects on the mini-banking crisis of 2023, from which his bank benefited, and warns of the risks of higher interest rates and a recession, not just for banks, but for the entire economy. He uses the purchase of First Republic in May 2023 after the failure of two other regional banks as an example of how quickly the banking industry can stabilize, albeit on the condition that interest rates do not rise dramatically and a serious recession does not occur. He recalls that “a simple increase in interest rates of two percentage points has reduced the value of most financial assets by 20 percent” and warns: “We must take into account that interest rates have been extremely low over a long period of time – it is difficult to say how many investors and companies are truly prepared for a higher interest rate environment.”
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