Breakingviews - Jamie Dimon makes anxiety a feature not a bug

In defiance of external ructions, JPMorgan reported a 22% yearly increase in earnings for the three months ended Sept. 30, including a 40% return on equity in its giant consumer bank. Its future is also rosy. Despite sharp rate hikes and softening household finances, the lender raised its interest-income forecast for 2023, while reducing its estimate of credit-card write-offs and expenses. The cost of bad debts rose from the previous quarter, but charges taken against future delinquencies fell. The same happened at rivals Citigroup (C.N) and Wells Fargo (WFC.N), which also unveiled results on Friday.

breaking news sponsored by

Lest nerves be soothed by those trends, Dimon lays on caveats with a trowel. He and his executives warn that the current performance is unsustainable, and that JPMorgan is, in analyst-speak, over-earning. He has cautioned that rates could hit 7% compared with about 5% now, and advises that wars in the Middle East and Ukraine make this “the most dangerous time the world has seen in decades.”

With the anxiety comes indignation, in the form of ravings about the impact of upcoming changes to capital requirements for U.S. banks. Peers also have vowed to “advocate” against Basel 3, but none has gone as far as Dimon, who last month questioned the “goddamn point” if it makes his financial institution hold more capital than European peers.