While Jamie Dimon calls himself "a real long-term bull on the U.S. economy," the shadow banking system could throw a wrench into that view, he says.
Dimon is referring to loans generated by non-bank institutions, such as mortgage and auto lenders. That sector is "huge and growing," yet "no one is paying attention to it," The JPMorgan Chase CEO said at a meeting of the Institute of International Finance, CNBC.com reports.
Some financial commentators have expressed concern about the subprime auto loan market. A whopping $146 billion of subprime auto loans were outstanding in the first quarter, up 15 percent from a year earlier, according to credit rating agency Experian.
"Not all subprime loans are inappropriate," economist Lawrence White of New York University told USA Today.
"But no lender should put a borrower into a loan he or she can ill-afford."
As for Dimon's enthusiasm for the broad economy, "innovation, it's everywhere," he said. "It's unbelievable. From nanotechnology to solar, the technologies that are going to benefit the global economy are going to be huge."
But increasing income inequality represents another fly in the ointment, Dimon said. "Until we are doing better for everybody you are going to have this sour attitude and hostility toward banks and businesses," he said.
As for solutions to that problem, Dimon recommends increasing the earned income tax credit, improving education and boosting job training.
© 2022 Newsmax Finance. All rights reserved.