Dimon Warns Leverage at All-Time High, Raising Risk of Market Shocks

▲ JPMorgan Chase CEO Jamie Dimon

Jamie Dimon, CEO of JPMorgan Chase often referred to as the "Emperor of Wall Street," has warned that global financial market leverage has reached an all-time high, cautioning that hidden borrowings could amplify market turmoil.

In an interview with U.S. business channel CNBC on the 6th (local time), Dimon said, "Margin debt is at an all-time high," adding, "There is a lot of margin debt that you don't see. It's not called margin debt; it's called something else—some of it hidden, some of it public leverage."

He pointed to prime brokerage, hedge funds, exchange-traded funds (ETFs), and Treasury arbitrage strategies as typical borrowing channels, assessing that "the overall level of leverage in the market right now is quite high."

He went on to warn that this excessive borrowing structure sharply increases market-wide volatility when distress hits a single investor or specific fund, "raising the risk that someone could quickly shake up the market and rattle people."

However, he drew a line, stating that this warning would not directly lead to a systemic crisis like the 2008 global financial crisis.

Citing the recent case of Situational Awareness, an AI-focused hedge fund that suffered massive losses from high-risk leveraged tech bets and faced liquidation, he assessed that the market has sufficiently absorbed the failures of individual funds without catastrophe.

"The worst-case scenario is when actual losses occur in the market," he explained, noting that "the 2008 crisis was driven by massive actual losses stemming from mortgages, rather than leverage itself."

He emphasized, "I am not saying that current leverage is at a systemic level high enough to cause a disaster, but it is true that the numbers are high."

Dimon also warned that structural capital demands—such as government fiscal deficits, infrastructure spending, and worldwide rearmament—could reignite inflationary pressures and drive up long-term interest rates, asserting that "global rearmament will be inflationary."

(Photo: AP, Yonhap News)

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