JPMorgan Chase & Co. (JPM) Chairman and Chief Executive Officer Jamie Dimon said
- "I wouldn't panic about what I'm about to say," Dimon, 55, said today at a U.S. Chamber of Commerce event in Washington. "You're going to see some municipalities not make it. I don't think it's going to shatter America, I just think it's a part of the credit cycle."
- Speculation about widespread municipal-bond defaults intensified in December when bank analyst Meredith Whitney predicted that "hundreds of billions" of dollars of municipal bonds may default in 2011 amid pressure to balance budgets.
JPMorgan, 
the second-biggest U.S. bank by assets, said in February its commercial bank's municipal-debt holdings are diversified enough to handle a likely increase in defaults.
the second-biggest U.S. bank by assets, said in February its commercial bank's municipal-debt holdings are diversified enough to handle a likely increase in defaults.Standard & Poor's said this month that municipal-bond defaults in the first two months of 2011 are down 50 percent from the same period last year. The research followed a report by the consulting firm of Nouriel Roubini, the New York University economist who in 2006 predicted the credit-market collapse, that said about $100 billion of U.S. municipal debt will default in the next five years.
Tom Dresslar, spokesman for California Treasurer Bill Lockyer, said comments that fuel fear in the municipal-bond markets only hurt debt holders and taxpayers.
Tom Dresslar, spokesman for California Treasurer Bill Lockyer, said comments that fuel fear in the municipal-bond markets only hurt debt holders and taxpayers.
- "We're starting to add up a whole bunch of things which are negative for America," he said. New rules on derivatives may hurt U.S. competitiveness, and "if we have higher capital limits than the rest of the world, now you're just starting to put nails in the coffin."
- "It's very important that the regulators and our government, the secretary of the U.S. Treasury, the chairman of the Federal Reserve, that they make sure that when we're done with all of this stuff, American banks can compete with the rest of the world," Dimon said. "You don't want to kill one of the golden gooses of healthy capital markets."