JPMorgan's Dimon: Weakening credit cycle could result in greater-than-expected losses, criticizes U.S. regulatory rules as “absurd”

Golden Ten Data reported on April 6 that JPMorgan CEO Jamie Dimon stated that the $1.8 trillion private credit market is relatively small. However, he warned that once the credit cycle weakens, losses on all leveraged loans will be higher than expected, as credit standards have already moderately weakened across the board. Private credit also often lacks high transparency or strict valuation loan "marks," increasing the likelihood that investors may sell off assets if they believe the environment will deteriorate. In his letter, Dimon also sharply criticized the revised capital rules proposed by U.S. banking regulators last month, calling certain aspects still "utterly nonsensical." JPMorgan is among the banks striving to water down the so-called Basel III and GSIB (Global Systemically Important Bank surcharge) draft rules of 2023. However, Dimon said on Monday that these proposals remain "riddled with loopholes," adding that JPMorgan's GSIB surcharge (the extra capital layer held by such banks) will only fall to 5.0%. He described this as a punishment for the bank's success, calling it "absurd" and "un-American."