JP Morgan CEO: US default will be catastrophic

[아시아경제 김수환 기자] The CEO of global financial group JP Morgan has warned that the default (default) following the collapse of the US debt limit negotiations will “create catastrophe”.

In an interview with a major foreign press on the 28th (local time), CEO Jamie Dimon said, “If the US debt limit negotiations break down, disaster could happen.” “(Woori Bank) is starting to prepare for the possibility that the debt ceiling negotiations will break down,” he said.

He continued, “(Woori Bank) began to analyze various factors that will affect the default, such as repo rate, capital ratio, contracts with customers, stock market, and the response of credit rating agencies.” I hope to find a solution to do this.”

“This is the third time that we could end up in a catastrophic situation,” Dimon said.

Previously, in the United States, there were debt ceiling crises in 2011 and 2017.

The U.S. has set a federal debt limit of $28.4 trillion by law. Previously, the ruling and opposition parties postponed the application of the debt limit until July 31 of this year in a 2019 agreement.

However, as the conflict between the ruling and opposition parties over the issue of handling President Joe Biden’s infrastructure development budget became severe, an agreement to adjust the debt limit was not reached. As a result, the debt limit was applied again from August.

In particular, on the same day, US Treasury Secretary Janet Yellen urged Congress to enact subsequent legislation to adjust the debt limit, saying that the country could go into bankruptcy on October 18.

“I think we need to get rid of the debt ceiling entirely through an agreement between the parties,” Dimon said.

CEO Dimon added, “If I remember correctly, in the past case of such a debt crisis, Woori Bank cost about 100 million dollars.”

Reporter Kim Soo-hwan ksh2054@asiae.co.kr