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Economy May Improve in Late 2011: JPMorgan Executive

There are signs the U.S. economy could improve in the latter part of this year, Jes Staley, head of investment banking at JPMorgan, told CNBC Thursday.

"If there is a surprise to the upside it will be the U.S. economy in the latter part of this year," he said. Large corporations are doing extremely well, with a lot of cash on their balance sheets, he pointed out, adding that small-business loans at JPMorgan were up about 70 percent from a year ago.

"Small businesses are beginning to borrow significantly for the first time in years," he said. "Last year we didn't have the demand."

The consumer, meanwhile, "is getting his own financial condition in much, much better shape," Staley said, citing the bank's data that tracks debt compared to disposable income.

"So, while there's a sense of confidence coming back, I think the consumer is poised to start spending again," Staley said. "There’s a lot of propellant to get the economy going once that confidence number comes back."

Right now, however, Staley said the investment bank's fee income for the third quarter is about $1 billion — half of what it was in prior two quarters.

"Our corporate clients put the brakes on, whether it was the [mergers and acquisitions] market, the [initial public offering] market ... the debt markets were a lot quieter, so fees just came down," he said.

The debt crisis in Europe has rattled the markets but Staley said JPMorgan is comfortable with its exposure.

"Our exposure strictly to Europe, we think, is very manageable," Staley said. "We want to stay engaged. Europe is a very important market for us."