Apr 06, 2026
3 min read
In his annual letter to shareholders, the CEO of JP Morgan warns of the dangers of war in Iran.There are also concerns about private loans, where there will be more losses than expected.Fewer regulations for banks
Concerns about rising geopolitical tensions and rising inflation.Another reason for concern is recent difficulties with private credit, although they do not pose a systemic risk.Instead, people are satisfied with loosening banking rules, but are only halfway there because even new, less stringent versions will continue to unfairly penalize large institutions.
For two decades, Jamie Dimon has been at the helm of JP Morgan, America's largest bank with a capital of almost 800 billion dollars.But size won't be enough to protect the Wall Street giant from geopolitical tensions, according to what its CEO wrote in his annual letter to shareholders.
"The challenges we face are significant," Dimon writes."The list is long, headed by the horrible war unfolding in Ukraine and the conflict in Iran, which could "lead to higher-than-expected inflation."
The impact on markets has already been felt as the first quarter of the year was the worst for the S&P 500 since 2022, down almost 4% since January.Blame a new rise in oil prices after the slump in the Strait of Hormuz, which rose above $100 a barrel.There is now a risk that higher energy prices will force central banks to take a more assertive stance on rates (the Fed is expected to cut only once in 2026), which could hurt growth.slows down, the door opens to stop.
Dimon writes that "the long-term effects will be difficult to predict," a scenario also complicated by the withdrawal of tariffs and the resulting "reconfiguration of the world's trade relations," another legacy of Donald Trump's second presidency.Fortunately, the US economy continues to hold up, and while consumption has weakened, businesses remain healthy.
AI will then support GDP and become part of the growing government deficit, given the large amount of investment required.JP Morgan CEO was very clear about artificial intelligence when he explained that “this is not a speculative bubble” and “on the contrary, it will bring significant benefits”.But “it is still impossible to predict who will be the winners and who will be the losers.”
For example, the software sector has been one of the latest pressures because AI will replace the products of companies like CrowdStrike, reducing their margins.Many are in the portfolio of big names in personal loans, which are an alternative to financing business bank loans.So clients began en masse to redeem their shares from big funds like Blue Owl Capital, which had to stop receiving applications.
The CEO of JP Morgan, however, does not see a systemic risk in this phenomenon, because private loans still have a limited value, around 1,800,000 million dollars.But, at the same time, Dimon pointed out that it is an industry "without much transparency or strict criteria for evaluating loans".And that makes selling likely "if investors expect a worsening of the outlook."
Thus, private credit losses could increase more than expected, and in any case, "insurance regulators will begin to impose tighter ratings or write-downs, which will lead to higher capital requirements."
On the contrary, banks need more regulation.While it is true that heavy regulations after the 2008 crisis have "provided positive results", it is clear that "they have created a fragmented and slow system with costly, overlapping and excessive regulations, which has reduced lending".
The picture has improved with the softer revision of the Basel III rules, which in the US will lead to lower capital requirements for banks. But for global systemically important institutions, a surcharge of around 5% will remain. An extra reserve that will lead to "holding up to 50% more capital on the vast majority of loans", underlines the CEO of JP Morgan. Which is "not right and anti-American."
And it is precisely the values of the United States that Dimon refers to at the beginning of his letter, in which he celebrates the 250th anniversary of the country's birth: "Even in difficult times, the United States will do what it has always done, look at the ideals that have made our nation unique and supported our leadership in the free world." (reproduction reserved)
