NEW YORK ( TheStreet) -- Goldman Sachs (GS) sees a "material decline" in the likelihood of a meltdown in the European economy as a result of recent loans by the European Central Bank, but JPMorgan Chase (JPM)Chairman and CEO Jamie Dimon appears more cautious.
At the start of the year, Goldman Sachs had expressed concerns about a disorderly Greek exit from the European monetary union leading to a massive European bank run. However, in comments Tuesday during the company's first-quarter conference call, Goldman Chief Financial Officer David Viniar praised the European Central Bank's Long-Term Refinancing Operation -- ultra-low interest loans to banks in the eurozone.
|JPMorgan Chairman and CEO Jamie Dimon|
"We believe the probability of a tail event in the euro area has materially declined in light of the LTRO," Viniar said. A tail event is Wall Street speak for economic catastrophe, as occurred when Lehman Brothers defaulted in 2008.
Viniar's statements contrasted with those of JPMorgan chief Dimon, however. Speaking to his investors on Friday, Dimon called the LTRO "a massive thing that took a real catastrophe in the short run off the table," but argued it "wasn't sufficient," adding "it was a short-term fix, not a permanent fix."-- Written by Dan Freed in New York. Follow me on Twitter
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