JP Morgan Chase CEO Says U.S. Banks Immune from European Debt Crisis (NYSE: JPM)

JP Morgan Chase & Co (NYSE: JPM) CEO Jamie Dimon said that United States banks would largely be immune from the current debt crisis in Greece and other European countries.

Dimon, speaking at JP Morgan’s annual investor day on Thursday, said that risk from potential defaults on sovereign debt has been hedged and that JP Morgan Chase and other U.S. banks won’t see any significant losses if the countries default.

“Greece itself would not be an issue for this company, nor would any other country,” Dimon said. “We don’t really foresee the European Union coming apart.”

Portugal, Italy, Ireland, Greece, and Spain, referred to by economists as the PIIGS countries, have all had significant budget deficits during the last two years because of the financial crisis.

Typically countries would weaken their currency to encourage domestic economic growth, but since the PIIGS countries are now members of the European Union, they do not have the monetary controls that countries with a national currency would, preventing them from easing liquidity and lowering interest rates.

Many believe that the PIIGS countries, especially Greece, have a probability of defaulting or missing payments on their national debt.

Dimon said that California could be a different story. Given the status and size California’s economy, “there could be contagion” if the state ran into problems in servicing its debt, he said.