Monday, December 28, 2009

Jamie Dimon Tells the U.K.: Governments Are Supposed to Bailout the Major Banks, the Major Banks Are Not Supposed to Bailout Governments

Jamie Dimon is finding out that the UK is not his lap dog. Philip Aldrick and Jonathan Sibun report for the UK's Telegraph:
JP Morgan, the giant US investment bank, has warned the Chancellor it may scrap plans to build a £1.5bn flagship European headquarters in Canary Wharf if politicians don't rein in their attacks on the City.

Jamie Dimon, chief executive, made the coded warning to Alistair Darling in an angry phone call after the Government revealed its 50pc super-tax on bonuses in the pre-Budget report. Although Mr Dimon did not explicitly threaten to can the 1.9m square foot Docklands development, he pointedly used it to demonstrate the bank's commitment to London...

JP Morgan is now considering its options, in part as a result of the authorities change in attitude. Concerns have been raised by the Financial Services Authority's (FSA) crackdown on pay, which bankers say is stricter than any other major financial centre, and the 50pc higher rate of income tax, as well as the super-tax on bonuses above £25,000...

Sources close to the bank said scrapping or substantially scaling down the development has been on the cards for the past two months. "Why would you want to make that kind of investment in London now?" a senior insider said. Others claimed that Mr Dimon was so furious with the Treasury about the super-tax – as JP Morgan has not received UK Government support – that "he wanted to lay down a marker".
The real answer to all this is that government's role in the banking sector should be eliminated, but it is fun to see Jamie with a little sand in his eyes. It certainly must be a new experience for the President Obama's favorite banker, who was gifted by U.S. authorties both Bear Stearns and WaMu.

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