Letting EU states go bust makes no sense: JP Morgan CEO

MILAN (BestGrowthStock) – Allowing European states to become insolvent makes no sense and imposing taxes on banks indiscriminately is not right, JP Morgan’s CEO Jamie Dimon said on Friday.

In an interview with Italy’s Il Sole 24 Ore, Dimon said if a European state became insolvent and there was a default on its debt, Europe would find itself having to save the banks holding that country’s bonds.

“I don’t think that’s the way to go,” Dimon said.

He said if a European state was allowed to default on its debt “the situation would precipitate triggering a whole chain of events.”

The Maastricht Treaty had not worked and its criteria needed changing, Dimon said.

On the idea of taxing banks for triggering the financial crisis, Damon said indiscriminate taxes do not work. “Only those that made a mistake should be punished,” he said.

He said the new taxes introduced in the UK were a good example of his point. “They are indiscriminate and so not fair.”

Dimon said banks that have made mistakes should be allowed to go bankrupt.

He said he agreed with higher capital requirements for banks and liquidity standards.

“But we are now running the risk of excessive regulation and creating confusion and duplicating many norms,” he said.

(Reporting by Stephen Jewkes; Editing by David Cowell)

Letting EU states go bust makes no sense: JP Morgan CEO