The scale of the job facing new Bradford & Bingley chief executive Richard Pym was underlined as the troubled lender crashed into the red and reported soaring levels of bad debts
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JPMorgan boss warns slump may last to 2010
13.05.08
JPMorgan Chase chairman and chief executive Jamie Dimon has warned there could be a slump lasting until 2010 following the current credit crisis.
He told bank investors that while the credit-market crunch may soon be over, the US economy could face a deep and extended recession. Dimon, who has avoided most of the pain of his counterparts on Wall Street, said the mortgage and corporate loan markets could bottom out this year.
But he added that the "slower burn" of a recession may rival the severity of the 1982 contraction. Challenging conditions, marked by tighter bank credit, new rounds of markdowns, further capital infusions and asset sales by banks, could last into 2010, he said.
Dimon said subprime mortgage losses could rise to between $200 million (£101.1 million) and $250 million in the current quarter, with prime mortgages generating about $100 million in losses. Loss rates in JPMorgan Chase's creditcard business are expected to reach 5% in the second quarter and as much as 6% next year.
Dimon joins a growing number of finance firm bosses who believe the worst of the credit crisis may be over. Citigroup chairman Sir Win Bischoff last week said pressures were easing although "2008 is not going to be easy". Lehman Brothers chief executive Richard Fuld also said "the worst is behind us".
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