Ex-JP Morgan chief says cutting state aid for banks will aid City

Tim Wallace
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SCRAPPING the implicit subsidy for banks and making sure they will be allowed to fail when they get into trouble should reduce public hatred for the sector and benefit the City in the long run, JP Morgan’s former investment banking head said yesterday.

Bill Winters argued US banks have benefited from state support and a sense of nationalism in handing out punishments, but that London will be better served by remaining open to global finance.

“Banker bashing is a bad thing – if you wake up every morning to be lambasted in the headlines, it is less likely you will want to work in the field, and that reaction to the crisis hurt the economy,” he told the parliamentary commission on banking standards. “But if you get it right, international financiers can work in London without domestic banks’ actions having repercussions for them and it should make it more attractive for them to work here.”

In that way the UK is better than the US where bankers have been attacked for decades, he said, but argued the UK must stop attacking the industry if it wants to remain a good place for global finance.