JPMorgan keen to throw off state aid shackles

Jamie Dimon yesterday expressed JPMorgan Chase's desire to be free from government intervention, calling the US Treasury's toxic assets plan “irrelevant” to his bank and saying the lender could immediately repay $25bn in federal aid without raising new capital.

The chief executive's comments underscore the belief at healthier banks, such as JPMorgan and Goldman Sachs, that severing financial ties with the government would give them an edge on weaker rivals.

However, JPMorgan's eagerness to repay the government and unwillingness to participate in the toxic asset plan could deepen investor fears of a polarisation of the US banking sector with some banks recovering and others, such as Citigroup and Bank of America, remaining mired in the crisis.

After JPMorgan reported strong first-quarter results driven by record investment banking profits, Mr Dimon said that being a recipient of government funds was “a scarlet letter” that had brought banks unwanted political and regulatory constraints.

He said his bank could repay “tomorrow” the government aid it received last year. But, unlike Goldman, which raised $5.5bn this week to help repay its $10bn capital injection, JPMorgan needed no extra capital.