Financial turmoil will be felt for years, says JP Morgan boss

These risks included exposure to interest rates being raised sharply around the world to tackle soaring inflation. Dimon criticised the US Federal Reserve for failing to incorporate higher borrowing costs into its annual stress tests.

The turmoil in the banking sector had led investors to price in a greater risk of a US recession, Dimon said, warning that banks were now more likely to show caution when approving new lending for businesses and households, with consequences for an economy already struggling with rate increases.

SVB last month became the largest bank to fail since the 2008 crisis after it was unable to raise emergency funding to plug a multibillion-dollar shortfall in its finances. The technology-focused lender struggled to keep up with a rapid increase in withdrawals, which turned into a run on the bank, which was then seized by US authorities.

That triggered a dramatic sell-off in wider bank shares amid fears of contagion, prompting JP Morgan, Bank of America, Goldman Sachs and others to deposit $30bn (£24bn) in First Republic Bank to support it as it risked becoming the next domino to topple.

Credit Suisse was sold to UBS in an emergency deal orchestrated by the Swiss government. The bank had entered the turmoil in a weak position after years of financial underperformance and scandals, before its top shareholder, the Saudi National Bank, ruled out providing further funding.

The only major bank chief during the 2008 financial crisis still in the same job, Dimon said the current crisis involved far fewer banks and suggested that there were fewer issues needing to be resolved.

Dimon said post-crash rules had encouraged banks to invest heavily in US government bonds, exposing them to paper losses amid a sharp fall in the price of government bonds as major central banks rapidly raised interest rates to tackle soaring inflation.

He said higher interest rates would have an important impact, not just for banks, but for those who need to refinance their borrowing.