Daniel Pinto, the president of JP Morgan Chase (NYSE:JPM) & Co., expressed concerns about the vulnerability of the robust U.S. economy to political and economic risks such as persistent high inflation and elevated or increasing interest rates. Pinto made his comments during a speech at the Institute of International Finance meetings on Friday.
He also pointed out geopolitical issues like Russia’s invasion of Ukraine, the Hamas attack on Israel, and complications from the US-China relationship as additional stressors that could potentially impact the economy.
Meanwhile, Fidelity International CEO Anne Richards discussed the complexity of the international situation amidst a febrile UK and US political atmosphere and bond market tumult. She highlighted the disruptions in the banking sector due to the collapse of regional lenders.
Richards warned that regulatory measures stifling investment could push more risk capital into the non-bank sector. She expressed support for crisis management measures like mutual funds gating as a way to mitigate these potential risks.
Pinto emphasized the necessity of sustainable business models for medium-sized banks. He cited the case of First Republic Bank (OTC:FRCB), where mismanaged interest-rate risk led to a run on deposits despite its pristine assets. This example underscores his point about the potential vulnerabilities facing even seemingly solid financial institutions in these uncertain economic times.
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