“You have not seen anything yet when it comes to a market downturn caused by the financial crisis,” writes Dimon. According to him, there is no doubt that there will be a new crisis and that it is likely to be even more volatile due to the tough regulations surrounding the financial industry.
“Such factors makes it more likely that a crisis will cause more volatile market movements, with a rapid decline in values, even in liquid markets. “
Dimon refers mainly to the most recent activity in the market for government securities and foreign exchange markets is a warning of what which is to be expected. He points including a sharp movement in US Treasuries last fall that was an event that should be extremely rare. If something similar happens in a stressed market conditions, it can have wide-ranging implications, says Dimon.
JP Morgan chief believes, however, that banks will not be in the center of the next crisis. Although they will not be able to mitigate market shocks, due to tough regulations, so the banking sector is generally safer and stronger than before.
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