Is JP Morgan The Private Sector Banking Regulator?

As we noted a few moments ago, JPMorgan Chase sold $10 billion shares at $40.50 a share despite the chaos in the nation’s capital and a market supposedly paralysed with fear. Increasingly it looks like JP Morgan Chase has become the private sector bailout entity for the banking sector. There was the acquisition of Bear Stearns, of course. But less well known is the fact that JP Morgan is far and away the largest secured creditor of Lehman Brothers.

JP Morgan is listed on a filing in the bankruptcy court as being owed $23 billion by Lehman, according to the Associated Press. We’re also heard rumours that JP Morgan played a critical role in pushing Merrill Lynch into the arms of Bank of America. It sounds a little like JP Morgan CEO Jamie Dimon is doing the job that Hank Paulson wishes was his.

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