JPMorgan chief executive Jamie Dimon has issued a warning about the "stretched" vehicle finance market in the United States. "Someone is going to get hurt," he said. "It won't be us."
Mr Dimon does not see concern about the market as a systemic issue or a sign of a downturn being imminent but warned of increased risks as a result of factors including higher default rates from increased subprime lending, the trend towards longer repayment periods and a potential drop in used-car prices, the Wall Street Journal reported.
Federal Reserve officials in the US have said eight of America's largest banks are likely to face bigger capital requirements in order to pass its annual stress tests in a proposed change that would come into effect in 2018.
Still in the US (which dominates this morning's news cycle), within hours of the Consumer Financial Protection Bureau (CFPB) revealing its proposed payday lending rules the Community Financial Services Association of America (CFSA), a trade body representing the industry, threatened to sue the CFPB "if it's necessary" after the period of public comment on the proposals. CFSA CEO Dennis Shaul said the proposed changes could wipe out the industry.
If implemented, the rules will oblige lenders to assess a borrower's ability to pay and make it more difficult for lenders to roll over loans.
Early indications suggest that the travails of some of the world's biggest banks evident in their first-quarter results have continued into the second quarter after Citigroup's CEO said on Wednesday that he expects net income for the second quarter to be about 25 percent lower than the same period in 2015. Citi will post its second-quarter results on 15 July.
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