Larry Summers Agrees With Concerns Raised By Jamie Dimon In His Annual Letter

JPMorgan Chase & Co. JPM CEO and Chairman, Jamie Dimon, released his annual letter to shareholder on Wednesday. In the letter Dimon argues that the Fed's financial-crisis driven regulations could have possible unintended consequences.

Lawrence Henry Summers, economist and President Emeritus and Charles W. Eliot University Professor of Harvard University, was on CNBC Thursday to share his perspective on Dimon's letter.

In Agreement With Dimon

"I think what Jamie actually was addressing was not the quantitative easing question," Summers said. "I think it was questions around liquidity and markets and I do think that that does need to be a pre-occupation of regulatory authorities."

He continued, "And I think there is a danger that in their enthusiasm for keeping each individual institution safe that regulatory authorities will lose sight of keeping markets open and liquid and I think that is a legitimate concern that is raised."

1 In 3 Billion

Summers also remarked on Dimon's comment that the chances of the financial-crisis happening were 1 in 3 billion, saying, "Now the one in 3 billion (chances of financial crisis), I think that's got more to do with the quality of the risk models that reach that conclusion than it does with some failure of regulation."

"So, whenever I hear someone in finance say a 1 in 2 billion year event just happened, I say to myself well you just demonstrated that you had a model for judging tail-risks that wasn't any good and that would be the inference I would take from that," Summers concluded.