JPMorgan Chase & Co. executives called on policymakers to resolve the government shutdown, which could "reduce growth to zero" if it persists through the end of the first quarter.
On a Jan. 15 call with journalists, CEO Jamie Dimon said good government policy is needed for a productive economy and that the government shutdown will hurt economic growth. While he said the bank was unsure of the exact impact, he said it will clearly have a negative effect on the economy.
"Someone estimated that if it goes on for the whole quarter, it can reduce growth to zero. We just have to deal with that and that's more of a political issue than anything else. It is what it is," Dimon said.
Executives fielded several questions about the government shutdown, which could affect capital market fees considering a partial shutdown of the SEC is expected to limit initial public offering activity. CFO Marianne Lake said the bank was primarily concerned about the shutdown's effects on general economic sentiment.
"We're less concerned about, obviously, the direct impact it might have on our fee performance and more concerned about the impact it has on uncertainty and sentiment, which can be pretty negative," she said.
Dimon and Lake both said the shutdown will create problems for the economy in a number of areas. While the executives said they are working with business clients affected by the shutdown, there is only so much they can do if a company was planning to IPO and is now unable to do so.
"There is a cumulative negative effect, which is slightly different over time than it is over a 20-day shutdown," Dimon said.
The bank reported fourth-quarter 2018 earnings that fell short of analyst expectations earlier on Jan. 15.