UK markets open in 5 hours 35 minutes

Coronavirus means a bad recession – at least – says JP Morgan boss

Rob Davies
Photograph: Brian Snyder/Reuters

The boss of JP Morgan, Wall Street’s biggest bank, has said the world faces a “bad recession” as he took a swipe at America’s lack of preparedness for the pandemic.

In his annual address, written a month after he underwent emergency heart surgery, Jamie Dimon said that at the very least a severe downturn was on its way coupled with financial pressures reminiscent of the banking crash more than a decade ago.

“We don’t know exactly what the future will hold – but at a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008.”

He said JP Morgan had not asked for any government support and would continue lending money, while offering greater forbearance for customers struggling to repay debts. But he admitted that even Wall Street’s largest bank “cannot be immune” to the economic turmoil and could be forced to suspend the dividend it pays to shareholders.

The banker has previously clashed with Donald Trump after claiming that he could beat the president in an election. And Dimon appeared to criticise the Trump administration’s lack of readiness for the outbreak.

“There should have been a pandemic playbook,” said Dimon.

But he also pointed to much deeper, structural problems in US society that he said were contributing to the danger presented by coronavirus.

“Of course, America has always had its flaws,” said Dimon. “The current pandemic is only one example of the bad planning and management that have hurt our country.”

Dimon, whose cash-plus-stock pay package was worth $31.5m (£25.6m) last year, highlighted worsening wealth inequality as one of America’s biggest problems, citing the fact that the share of wages for the bottom 30% of US citizens has been declining.

The JP Morgan boss also lamented poor outcomes in education, a costly healthcare system that many people cannot access, the lack of a social safety net and a poor immigration policy.

“We need to acknowledge these problems and the damage they have done if we are ever going to fix them,” said Dimon, who returned to work this year after heart surgery.

“As we have seen in past crises of this magnitude, there will come a time when we will look back and it will be clear how we – at all levels of society, government, business, healthcare systems, and civic and humanitarian organisations – could have been and will be better prepared to face emergencies of this scale.”

JP Morgan reported profits of $36.4bn last year and Dimon said the bank could survive and keep lending, even if its most pessimistic scenarios for the effect of the pandemic on the global economy came to pass.

But its dividend could be suspended in the “extremely adverse scenario” in which the US economy shrinks by 35% in the second quarter and unemployment hits 14% by the end of the year.