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

Jamie Dimon, CEO of JPMorgan Chase often referred to as the "Emperor of Wall Street," has warned that leverage across global financial markets 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 is hidden, and some of it is public—leverage of that sort."

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

He warned that such excessive borrowing structures significantly increase the risk that if a single investor or a specific fund runs into trouble, it could sharply drive up market-wide volatility, making it "more likely that somebody shakes the market up pretty quick and rattles people."

However, he drew a line, noting that this warning does not directly translate to a systemic crisis akin to the 2008 global financial crisis.

Mentioning the recent case of "Situational Awareness," an AI-focused hedge fund that faced liquidation after suffering massive losses from high-risk leveraged bets tied to tech stocks, he assessed that the market has adequately absorbed individual fund failures without catastrophic fallout.

"The worst part is when you actually have real losses in the market," he explained, adding, "The 2008 crisis was driven by massive actual losses stemming from mortgages, rather than leverage itself."

At the same time, he emphasized, "I'm not saying the current level of leverage is systematically high enough to cause a disaster, but the numbers are high."

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

(Photo: AP, Yonhap News)
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