California is a greater risk than Greece, warns JP Morgan chief

By James Quinn, US Business Editor in New York Published: 8:20PM GMT twenty-six February 2010

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Governor Arnold Schwarzenegger is desperately perplexing to revoke California"s $20bn necessity Photo: BLOOMBERG

Mr Dimon told investors at the Wall Street bank"s annual assembly that "there could be contagion" if a state the distance of California, the greatest of the United States, had problems creation debt repayments. "Greece itself would not be an issue for this company, nor would any alternative country," pronounced Mr Dimon. "We don"t unequivocally predict the European Union entrance apart." The comparison landowner pronounced that JP Morgan Chase and alternative US rivals are mostly defence from the European debt crisis, as the risks have mostly been hedged.

California however poses some-more of a risk, since the state"s $20bn (�13.1bn) bill deficit, that Governor Arnold Schwarzenegger is desperately perplexing to reduce.

Greece contingency have �4.4bn cuts prior to EU bail-out Greece"s "worst fears" reliable says PM Papandreou Germany debt arch hints at Greek rescue UK debt arch Stheeman sees no risk of predicament Britain"s necessity third misfortune in the world, list Concerns grow over China"s sale of US holds

Earlier this week, the state"s legal body upheld bills that will cut the necessity by $2.8bn by bill cuts and alternative measures. However the former Hollywood movie star incited statesman is seeking for $8.9bn of cuts over the subsequent sixteen months, and is additionally anticipating for as most as $7bn of handouts from the sovereign government.

Earlier this week, John Chiang, the state"s controller, pronounced that if a applicable plan to revoke the necessity and enlarge money levels is not reached soon, he will have to lapse to arising IOU"s, forcing state workers to take one more delinquent leave and potentially frozen spending.

Last summer, California released $3bn of IOU"s to creditors together with residents due taxation refunds as a approach of staving off a money crisis.

"I can"t write checks but money; that"s opposite the law. My main idea is to keep the state afloat, but I won"t be means to do it but the assistance of new legislation," pronounced Mr Chiang.