Jamie Dimon, chair and CEO of JP Morgan Chase, has been dubbed the king of Wall Avenue, whereas additionally being seen as America’s “least-hated banker”.

He’s seen as a degree head in banking circles, so his views on the sudden collapse of Silicon Valley Financial institution (SVB) final month, which despatched shockwaves by the worldwide tech and startup neighborhood, are value noting.

Dimon’s annual shareholder letter is as eagerly anticipated as Warren Buffett’s views for Berkshire Hathaway, and this yr’s version isn’t any exception, devoting appreciable time to current banking failures, most notably SVB and Credit score Suisse.

The CEO says in his letter that a lot of the dangers that led to final month’s financial institution failures have been “hiding in plain sight”, however there was additionally an “unknown threat” that immediately contributed to the collapse of SVB that no quantity of regulation can tackle – the truth that “a small variety of enterprise capital firms” managed lots of the account holders and created the financial institution run in urging them to withdraw funds.

The controversy over the position of traders within the collapse of SVB is ongoing, with some pointing to billionaire investor Peter Thiel who advised his Founders Fund purchasers to withdraw their funds. A number of weeks later,  Thiel advised the Monetary Occasions  that he left US$50 million within the financial institution when it went underneath. A number of different VC funds, together with Coatue Administration, Union Sq. Ventures and Founder Collective, additionally advised founders to tug their money from SVB.

VCs have been definitely then vocal about wanting the US authorities to intervene, since its current deposit assure scheme solely coated $250,000. Ultimately, the US Treasury Division has intervened to ensure the total worth of all SVB deposits in a bid to halt broader financial institution run jitters.

Dimon takes shareholders by what’s already identified about why the financial institution went underneath, however for the opposite gamers concerned “this wasn’t the best hour for a lot of”.

“A lot of the dangers have been hiding in plain sight. Rate of interest publicity, the honest worth of held-to-maturity (HTM) portfolios and the quantity of SVB’s uninsured deposits have been all the time identified – each to regulators and {the marketplace},” Dimon wrote.

“The unknown threat was that SVB’s over 35,000 company purchasers – and exercise inside them – have been managed by a small variety of enterprise capital firms and moved their deposits in lockstep.

“It’s unlikely that any current change in regulatory necessities would have made a distinction in what adopted. As a substitute, the current speedy rise of rates of interest positioned heightened deal with the potential for speedy deterioration of the honest worth of HTM portfolios and, on this case, the dearth of stickiness of sure uninsured deposits.”

Dimon argues that “paradoxically” banks wolfed up authorities securities as a result of the regulators favoured them.

“This isn’t to absolve financial institution administration – it’s simply to clarify that this wasn’t the best hour for a lot of gamers,” he wrote.

“Dangers are ample, and managing these dangers requires fixed and vigilant scrutiny because the world evolves.”

Dimon counsels that “we keep away from knee-jerk, whack-a-mole or politically motivated responses that usually lead to attaining the other of what individuals meant” relating to the following steps in regulating the monetary sector to keep away from a repeat.