Jamie Dimon and\u00a0his Chase bank are crucial to the success of a\u00a0\u20ac5 billion capital raised by Monte dei Paschi di Siena, which was recently found to be the worst lender in Europe by regulators.\u00a0J.P. Morgan is\u00a0the lead bank on the deal, charged with finding investors for the huge share sale. That is a tall order since MPS is trying to raise a sum equivalent to 7 times its current market value. No matter. Senior figures in Italy\u2019s banking elite draw confidence from the fact that Dimon has personally been involved. \u201cIf Dimon thinks we can do this, then we probably can,\u201d one banker told me.<\/p>\n
Dimon was in Rome in July, ostensibly to celebrate a century of J.P.Morgan\u2019s activities\u00a0in Italy. But he paid a visit to Matteo Renzi to discuss MPS. While there, he gave a slightly od interiew odd interview\u00a0to Il Sole 24 Ore, in which he was reported as saying that \u201cgovernment intervention in banks could have its merits.\u201d I say odd because Dimon is a well-known critic of government.<\/p>\n
The best solution may be to have MPS\u2019 capital raise after the referendum. That way, if the capital raise fails, Renzi could launch a public rescue of the Siena bank without risking a public backlash that could boost the 5Star Movement in the referendum campaign. (Hey, nobody said that Italian politics was straightforward \u2026). Since Renzi can call the referendum between October and December, that means MPS will have to wait a while to tap investors.<\/p>\n
J.P.Morgan and the many other banks who are working on these deals will get some pretty hefty fees to arrange the share sale. Dimon\u2019s bank should also get handsomely rewarded if in fact the bank is\u00a0providing a\u00a0\u20ac7 billion bridge loan to help the Atlante Fund buy MPS\u2019 bad loans. Plus, of course, the gratitude of, and further deals from, the Italian government for helping out when needed. Plus, bragging rights. Don\u2019t forget bragging rights.<\/p>\n
Jamie Dimon and\u00a0his Chase bank are crucial to the success of a\u00a0\u20ac5 billion capital raised by Monte dei Paschi di Siena, which was recently found to be the worst lender in Europe by regulators.\u00a0J.P. Morgan is\u00a0the lead bank on the … Continue reading ![\"Dimon\"](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2013\/08\/Dimon-300x220.jpg\")
<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"