DAVOS-Sarkozy to JP Morgan chief: Banks "defied common sense"
Thu Jan 27, 2011 1:43pm EST
* French president says banks need tough regulation
* Attacks bankers' behaviour
* JP Morgan's Dimon says "unproductive" to bash banks
By Lisa Jucca and Paul Taylor
DAVOS, Switzerland, Jan 27 (Reuters) - French President Nicolas Sarkozy clashed with the head of U.S. bank JP Morgan Chase (JPM.N) at the Davos forum on Thursday, telling him bankers had done things which defied common sense.
Jamie Dimon, credited with having steered JP Morgan through financial turmoil in 2007-08, had earlier in the day lashed out at persistent bank bashing nearly three years after the global credit crisis began, saying it was "unproductive and unfair".
But when he rose at a later session of the World Economic Forum to ask Sarkozy to get the G20 to avoid overregulation of banks, the French president launched into a broadside accusing financiers of behaviour that he said had caused the crisis.
"The world has paid with tens of millions of unemployed, who were in no way to blame and who paid for everything," Sarkozy said to Dimon. "It caused a lot of anger."
The French leader also renewed his call for a financial transaction tax to fund development but acknowledged that many G20 countries opposed such a levy. He suggested a small pioneer group of states might go ahead with a tiny levy or some other form of innovative financing to lead the way.
Dimon praised governments for intervening to save the financial system in 2008. But he said the G20 group of major economies, which Sarkozy chairs this year, should take a deep breath before imposing more regulation.
"Too much is too much," he said.
The outspoken Dimon had earlier told a separate panel not all lenders made the same mistakes in the run-up to the crisis.
"Not all banks are the same and I just think that this constant refrain 'bankers, bankers, bankers' is just unproductive and unfair. People should just stop doing that."
He echoed comments by Barclays (BARC.L) CEO Bob Diamond, who told a UK parliamentary committee this month that "the period of remorse and apologies for banks" needed to be over. [ID:nLDE70A0X8]
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