JPMorgan's a Lot More Cautious on Credit, Rohrbaugh Says

Watch JPMorgan's a Lot More Cautious on Credit, Rohrbaugh Says - Bloomberg on Dailymotion

Transcript

00:00How concerned are you about some sort of systemic risk that is beyond the banking system that is

00:06really focused on credit? Sure. I mean, I'm a trader by background. I worry about everything.

00:11And Jamie, I think when he refers to cockroaches, I mean, he can speak for himself, but he's really

00:16trying to keep us and everyone else on their toes. And you're starting to see things that feel late

00:21cycle. And I would feel quite strongly that we're in the latter innings of a credit cycle.

00:26The problem when being the latter innings, you don't know if you're in the sixth inning or the

00:30ninth inning and no one will ever know until afterwards. So, you know, equity valuations are

00:35very high. Credit spreads are very tight. You're starting to see things that Jamie was referring

00:41to. I mean, whether it's fraud or whatever it ends up being, but significant cracks in certain

00:46businesses and business models all make you nervous. So while it could last certainly for

00:52another six or 12 months, we're just being a lot more cautious in how we think about credit.

00:56What does that mean? I know that there were bigger loan loss provisions that were set aside,

01:00but is it also in terms of tightening lending standards as well?

01:03I mean, we've always been very disciplined at JPMorgan. We always evaluate every deal on a

01:09standalone basis. And we're just making sure that we're sticking to what is our core credit

01:15philosophy, like being very disciplined on the quality of the credit, the terms, the pricing.

01:21And I think as long as we continue to do that, we can be comfortable. We would hopefully avoid

01:26any very large missteps.