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“Big Business” N°115: Did you say systemic risk?

2023-03-20T09:32:44.734Z


EXCLUSIVE SUBSCRIBER LETTER - Vade-mecum of tools for managing a financial crisis, from one bank panic to another.


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Just fifteen years ago, on his birthday on March 13, 2008 - he was then 52 years old - Jamie Dimon, the boss of the American bank JP Morgan, was preparing to conclude the first major rescue of what was to become the Great financial crisis symbolized by the bankruptcy of Lehman Brothers on September 15th.

JP Morgan had at the time bought at a knockdown price Bear Stearns, the smallest of the five major Wall Street investment banks whose stock price and liquidity were falling at full speed due to concerns created by the onset of the crisis. subprimes.

An operation intended to contain the fire on the markets by backing Bear Stearns to the balance sheet of JP Morgan,

all with a guarantee of 29 billion dollars provided by an exceptional line of credit from the Federal Reserve intended to absorb losses beyond the first billion left to be borne by the purchaser.

Modalities quite similar to those which made it possible on Sunday evening to conclude the spectacular takeover of Credit Suisse by UBS, under the aegis of the Swiss authorities.

Because fifteen years after the 2008 crisis, the storm is brewing again.

And, at 67, Jamie Dimon is still at the front.

He is still at the head of JP Morgan and as such he is the only banker still in office to have weathered the 2008 crisis. For his birthday in 2023, the Wall Street godfather once again tried to imagine an operation to restore confidence, this time in US regional banks.

After the flash bankruptcy of Silicon Valley Bank, the markets and depositors became concerned about the financial situation of other regional banks, which are subject to less strict regulation than the systemic banks - in particular for the valuation of their bond portfolios carrying less - latent values…

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Source: lefigaro

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