Jamie Dimon says the banking chaos won't spark a 2008-style financial crisis - and Warren Buffett's $1 million offer should reassure depositors that their money is safe

• Jamie Dimon doesn't expect the current banking chaos to morph into a financial crisis.
• Warren Buffett's offer to bet $1 million on the safety of US bank deposits is reassuring, he said.
• The JPMorgan CEO noted that fewer banks are exposed and there are fewer issues today than in 2008.

Jamie Dimon doesn't expect the recent banking turmoil to spark a full-blown financial crisis — and has pointed to Warren Buffett's offer to stake $1 million on the safety of US bank deposits as a reassuring sign for the sector.

Only a handful of American banks are overly exposed to rising interest rates, have excessive amounts of uninsured deposits, or have too many assets valued at current market prices, the JPMorgan CEO said on Friday. Those three factors were key to Silicon Valley Bank's implosion in March.

SVB's collapse has led to regional banks such as First Republic being hit by deposit outflows and sharp declines in their stock prices. Customers have moved their money into bigger banks and money-market funds out of concern it could be lost if the lenders collapse. Meanwhile, investors have dumped the shares as they fear more bank runs and slimmer profits.

However, Dimon predicted robust earnings from regional banks this week, and noted lenders have ways to reduce their vulnerability to rising rates and deposit withdrawals. He made the comments during the banking behemoth's first-quarter earnings call, according to a transcript provided by AlphaSense/Sentieo.

"You've already seen things calm down quite a bit, particularly in deposit flows," the billionaire banker said. "Warren Buffett was on TV talking about that he would bet $1 million ... that no depositor will lose money in America."

The famed investor and Berkshire Hathaway CEO told CNBC last week that he would wager $1 million that no American depositor would lose their money in a US bank failure within the next year. He issued an open invite for someone to match his bet, and said the combined $2 million at stake would be donated to a charity of the winner's choice.

"I'm betting on what is certain to happen politically," Buffett said, predicting the federal government will guarantee bank deposits beyond the current $250,000 limit per customer at any one bank. "It isn't the law now, but it'll get changed."

"You don't need to turn a dumb decision by managers into panicking the whole citizenry of the United States about something they don't need to be panicked about," Buffett added.

The willingness of a "very bright man" to risk his own money should relieve depositors' worries, Dimon said. The banking boss also dismissed comparisons between today's situation and the 2008 financial crisis, saying the current turmoil will be much more short-lived.

Yet Dimon still advised taking precautions against the Federal Reserve hiking rates higher as it seeks to rein in historic inflation. The US central bank has lifted rates from nearly zero to upward of 4.75% over the past year or so. Higher rates can curb the pace of price increases by making borrowing more expensive and encouraging saving over spending, but they can also sap demand and pull down asset prices, increasing the risk of a recession.

"People need to be prepared," he said. "They shouldn't pray that they don't go up. They should prepare for them going up. And if it doesn't happen — serendipity."

Dimon struck a cautious tone in his recent shareholder letter too. He warned that "storm clouds ... remain on the horizon, and the banking industry turmoil adds to these risks."

There are fewer banks at risk and fewer problems in the banking industry now than during the financial crisis, he noted. Yet lenders may still pull back in fear of further turmoil, reducing access to credit in the economy and potentially hampering consumer spending, Dimon said.