- Jamie Dimon said JPMorgan has started preparing for the possibility that the US defaults on its debt.
- He calls this scenario "potentially catastrophic" and hopes legislators find a way to solve the crisis.
- "Every single time this comes up, it gets fixed, but we should never even get this close," he told Reuters.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Jamie Dimon, president and CEO of JPMorgan Chase, said his bank has started preparing for the possibility that the US defaults on its debt - a scenario he described as "potentially catastrophic" - though he hopes legislators will find a way to solve the crisis.
"This is like the third time we've had to do this. It is a potentially catastrophic event," Dimon told Reuters before a ribbon-cutting ceremony at one of his bank's newest locations in Washington.
The executive told Reuters such an outcome would impact repurchase agreement and money markets as well as affect how rating agencies would react. His bank has also begun looking through client contracts, a process that requires significant resources.
"You've got to check the contracts to try to predict it out ... If I remember correctly, the last time we got prepared for this, it cost us $100 million," he said.
Dimon told Reuters he would support a bipartisan bill that will eliminate the debt ceiling altogether
"Every single time this comes up, it gets fixed, but we should never even get this close," he said. "I just think this whole thing is mistaken and one day we should just have a bipartisan bill and get rid of the debt ceiling. It's all politics."
Democrats, meanwhile, are rushing to raise the government's $28.4-trillion borrowing limit. They have until October 18 to do so.
Janey Yellen, who reiterated her call for bipartisanship, told lawmakers she will try to exhaust extraordinary measures if Congress has not acted to raise or suspend the debt limit by that date.
While analyst consensus indicates confidence the crisis will be averted, some, including Chris Zaccarelli, CIO at Independent Advisor Alliance, have expressed concern.
"Most likely the Congress will either raise the debt ceiling before the end of the week or the Federal Reserve could step in and use extraordinary measures," he said via email. "Still, it's a sign of the dysfunctional times that Republicans won't go along with Democrats in passing a debt ceiling increase."
The debt ceiling has been a point of contention between both parties since it was first introduced in 1917 to encourage the government to slow its borrowing.