The Ruinous Fiscal Impact Of Big Banks

By Simon Johnson

The newly standard line from big global banks has two components – as seen clearly, for example, in the statements of Jamie Dimon (JP Morgan Chase) and Bob Diamond (Barclays in the UK) at Davos last weekend. First, if you regulate us, we’ll move to other countries. And second, the public policy priority should not be banks, but rather the spending cuts needed to get budget deficits under control in the US, UK, and other industrialized countries.

This rhetoric is misleading at best. At worst it represents a blatant attempt to effectively shakedown the public purse.