EU needs to address bank debt now, JPMorgan CEO warns

27 May 2010

The European Union (EU) must take action now to address the debt problems of Greece and Spain, JPMorgan’s chief executive officer (CEO) has claimed.

According to Bloomberg, Jamie Dimon, CEO of the investment bank, made the comments at a dinner in New York.

The banking chief explained that not considering the potential issues faced by the bailout at this point in time could lead to the financial problems becoming more acute in the future.

He was quoted by Bloomberg as saying: “If they don’t fix the problem now, they’re still going to have to fix it later by bailing out their banks. If they have to bail out their banks, it will be far worse than making that sovereign debt good.”

Mr Dimon added: “A lot of that sovereign debt is owned by European banks, so when these countries have problems, so will their banks.”

The comments follow the decision from governments of states within the EU and the International Monetary Fund to provide Greece with $145 billion worth of funds as an emergency bailout package.

Greece is receiving the money to prevent it from defaulting on its debt, a situation which could lead to the stabilisation of the wider economy within the EU.

By Jim Ottewill

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