Jamie Dimon says one market risk could amplify market swings
JPMorgan CEO Jamie Dimon has warned that high levels of market leverage could amplify sudden disruptions and volatility. While he stopped short of predicting a systemic crisis, he noted that margin debt is at record highs and recent market events have highlighted the risks of leveraged positions.
Why it matters
Dimon's warning underscores growing concerns among financial leaders regarding the stability of global markets amid increasing use of leveraged financial products.
Jamie Dimon says elevated market leverage raises the risk of sudden disruptions. Tom Brenner/Bloomberg/Getty Images JPMorgan CEO Jamie Dimon says broader market leverage is "pretty high." High leverage raises the risk of sudden market disruptions, he says. Leverage has come under scrutiny after South Korea's market sell-off and the Situational Awareness unwind. As leveraged exchange-traded funds draw growing scrutiny, JPMorgan Chase CEO Jamie Dimon is pointing to a broader risk across markets. "Market leverage is pretty high," Dimon told CNBC in an interview aired on Wednesday. "When you have that, you do have a higher chance that something will disrupt the market in a quick way and people will get rattled over it," he said. Dimon made the comments after being asked about the proliferation of leveraged single-stock ETFs that have drawn renewed attention in recent weeks.
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