JPMorgan London plans in doubt - aftre UK bonus tax

Discussion in 'Wall St. News' started by ASusilovic, Dec 29, 2009.

  1. JPMorgan is considering axing plans for new European headquarters in Canary Wharf, London, in the wake of the bank bonus tax Alistair Darling, UK chancellor, announced in his pre-Budget report this month.

    A senior JPMorgan executive said: “It will be a factor in the decision”.

    Bankers recognise that the 50 per cent bonus tax is a one-off measure this year justified by exceptional profits aided by international government bail-outs, but many see the tax as further evidence that the UK is becoming anti-bank.

    Jamie Dimon, JPMorgan’s chief executive, made that point to Mr Darling in a phone call shortly after the bonus announcement, people close to both men said.

    He stressed the bank had been a “good corporate citizen” in London for decades and that if the business environment was deemed hostile, it could divert future investment elsewhere.

    Certain trading functions are highly mobile such as foreign exchange, interest rates and commodities.

    A JPMorgan insider said: “When we’re adding bodies in rates or FX, we can do that in New York as easily as London. When we’re building commodities, we can do it in Switzerland or Singapore.”

    The bank had taken an option on a newly built headquarters in Canary Wharf in late 2008 to consolidate staff from several London buildings.

    However, the bank has been uncertain for months whether to proceed because of financial uncertainty.

    The UK Treasury is phlegmatic about such threats because it believes the one-off nature of the bonus tax will prevent companies leaving the UK.

    The levy is pencilled in to raise £550m ($880m), although many analysts predict that it could raise a much higher figure.

    The Treasury said last night that the chancellor had regular phone conversations with corporate figures. An official said: “This is a fair measure. No bank would be left standing around the world without government intervention.”

    Economic wars have just began...
  2. Once again, a few privileged heads of companies get to pick up their bat phone to gov't heads whenever they've got an issue with something.

    I'm not sure how I can deny to anyone that we're not living in a fascist society anymore.
  3. Lethn


    What's even worse is the scumbags in the companies that axe employees in order to give their executives bonuses. At least using these kind of tactics has a bit more class.
  4. patchie


    This story illustrates the shortsightedness of banking executives. This is a ONE TIME tax. Altering future business plans for a one time event is ludicrious.
  5. It's a precedent-setting one time tax which sends a message that it can easily be implemented next year and the following if the populist winds so decry.
  6. This is exactly why these threats are just bullshit.
  7. patchie


    As was a massive banking bailout program. Lets face it, these banks have only survived because of the special one-time grants made towards them by way of government sponsored aid.

    We can all play that "precedent setting" argument.
  8. gkishot


    They survived because government couldn't do without them. Couldn't let them go.
  9. zdreg


    is it such a pleasure to live in London?

    how about decisions to avoid the UK that are made behind closed doors?

    these would include scaling back both expansion and initial plans to set up operations in the UK.
  10. What a lying scumbag. So, not a single bank, anywhere in the world, was positioned to survive a financial meltdown? Yeah right.
    #10     Dec 29, 2009