Last Spring, sitting in an office, Jamie Dimon was looking at an interactive map of the US, going zip code by zip code trying to assess potential regional commercial real estate losses, according to a source close to JPMorgan (JPM).
The source had to convince Dimon that going through the map was a necessary step and asked him why he hadn’t done it before.
“They had no idea what was going on. I told him he needed to drill down to that level.”
Even now, none of the big bank CEOs have a clear idea as to how much commercial real estate exposure they have on their balance sheets, the source believes. In essence, they are hoping things get better and trying to delay the whole process through various schemes, including new accounting standards.
“A huge cleanup has to happen in terms at looking at the books of the huge merged institutions. We haven’t even assessed the scope of that problem yet, and no one knows what they hold. No CEO has a true picture of what the losses are. It’s ridiculous.”