As we always say in these pages, when a CEO doesn´t like something, one thing is to complain about it in the press but, more importantly, is to just say no!
If Mr. Dimon doesn´t like to help buyouts in this way, he just needs to ensure that his bank does not participate.
When the music stops and the trouble begins, if Mr. Dimon is correct, those banks such as his will be left standing.
That is the way of evolution!
Onésimo Alvarez-Moro
See article:
Jamie Dimon, chief executive of JPMorgan Chase, yesterday attacked as "a terrible idea" the practice of investment banks committing to pick up shares in leveraged buy-outs that private equity firms cannot sell on to other investors.
Mr Dimon said the provision of so-called "equity bridges" was bad for the banks and the private equity firms. "So I hope they go the way of the dinosaur."
The practice has been seen by many observers as part of an excessively lax lending environment that is now threatened by the sharp downturn in sentiment among investors in buy-out debt in recent weeks.
As JPMorgan announced a 21 per cent jump in second- quarter earnings to $4.2bn, Mr Dimon sought to calm fears about the impact of problems in the US subprime mortgage sector and the leverage lending market.
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