JPMorgan CEO Dimon on real estate: 'There will be problems in real estate...'

JPMorgan CEO Jamie Dimon evaluated the difficulties being experienced in the commercial real estate sector. In his speech, Dimon stated that the problems in the real estate sector are at a manageable level as long as the US avoids a recession. 

Speaking to CNBC, JPMorgan CEO Jamie Dimon said that lower valuations linked to high interest rates are "not a crisis, this is something that is known."

"REFLECTS A NORMALIZATION PROCESS"

Dimon stated, "If we don't have a recession, I think this problem can be solved through refinancing and by putting in more capital. If interest rates rise and we have a recession, there will be problems in real estate, and some banks will have bigger problems than others in terms of real estate."

In the US, New York Community Bancorp's decision to set aside provisions for loans tied to commercial real estate that were 10 times analyst expectations, and its decision not to pay dividends, had sparked a debate over the potential for commercial real estate to create a crisis.

Dimon believes that rising default rates reflect a "normalization process" following a long period of low interest rates.