Jamie Dimon has noted that the banking crisis was 'hiding in plain sight' and that regulators already knew about SVB's risks, however had seemingly not acted upon them. He has also warned that the crisis is not yet over and has cautioned against regulatory overreach.
Jamie Dimon highlights that SVB’s interest rate exposure, hedging (or lack thereof), and risk management issue were known. The nature of its deposit book was also suspected given that SVB actively courted VC funds, startups, and tech firms. Regulators had intereacted with SVB over its issues. However, it appears that little changed with SVB’ operations. SVB ultimately collapsed. Thus, the banking crisis was ‘hiding in plain sight’. And, the its ramifications are still ongoing, with the crisis ‘not yet over’.
Jamie Dimon also pushes back against ‘knee jerk’ regulatory responses and regulation for the sake of regulation. Rather, he favors calibrated regulation that can address - and mitigate - the risks that banks such as SVB faced. These could include analyzing banks’ capital requirements, and whether the capital requirements should adjust based on the bank’s interest rate risk, desposit concentration, and loan concentration.
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