"The closer you get to it, you will have panic" in the form of stock market volatility and upheaval in Treasurys, he said.

Such an event would ripple through the financial world, impacting "contracts, collateral, clearing houses," Dimon said.

JPMorgan Chase CEO Jamie Dimon said Thursday that markets will be gripped by panic as the U.S. approaches a possible default on its sovereign debt.

An actual default would be "potentially catastrophic" for the country, Dimon told Bloomberg in a televised interview. Dimon said he expects that worst-case scenario will be avoided, however, because lawmakers will be forced to respond to growing concern.