JPMorgan CEO Jamie Dimon has warned that some banks are repeating mistakes from before the 2008 financial crisis.

Even though corporate bond markets look calm and credit spreads are near historic lows, the structure of the markets has changed in ways that will matter in a downturn.

Before 2008, banks and broker dealers were dominant price makers, holding large inventories to stabilize prices during stress. Regulation and higher capital costs have sharply reduced their inventories.

ETFs have expanded rapidly and now hold substantially more corporate debt than US banks, but ETFs are price takers that would reinforce any downward moves, potentially turning a sell-off into a rout.

There's no shortage of catalysts that could cause credit spreads to widen, from massive AI capex to private credit loans to software firms. The realization that the credit cycle is turning could trigger a rush to the exits.

Investors might find they can't get out nearly as quickly as they'd like during a sell-off.