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The top executive of JP Morgan Chase signed off on a massive three billion pound headquarters building in London following assurances from UK government officials about pro-business policies.

Sequence of Developments

The Wall Street banking giant, that together with Goldman Sachs announced significant expansion projects shortly following avoiding higher taxes in the UK government's recent budget announcement, only gave final approval the previous week.

This authorization was preceded by a trip to the United States by the prime minister's envoy, that met with Jamie Dimon to offer guarantees about the UK's economic approach.

Financial Background

The meeting occurred days before the chancellor disclosed revenue-raising measures in a economic plan that spared banks from increased charges, in response to significant pressure from the financial sector.

"The project ... would potentially been canceled if this economic statement had been perceived as anti-prosperity."

Development Information

On recently, the banking giant announced plans to build a 3 million square foot headquarters in Canary Wharf, which will become its primary British base and house more than half of its London employees.

The company stressed that the project would depend on "supportive government policies in the UK".

Financial Benefits

The financial institution has indicated that the project could contribute nearly ten billion pounds to the British economy over the next six years.

The Treasury chief expressed enthusiasm about the project, describing it as a "significant demonstration of faith in the British economic prospects".

Broader Perspective

A source familiar with the development project indicated that the decision to invest was "the result of comprehensive analysis" and that "it was impossible to predict whether banks were going to be taxed before the financial statement".

The banking executive stated that the "Treasury's emphasis of economic growth has been a significant element in helping us make this choice".

Related Developments

A second financial institution disclosed that it would enlarge its Midlands operation and hire new employees, in a initiative that would more than double its staffing levels in the UK's second biggest city.

The government had considered expanding the bank levy in the UK, as it considered methods to increase income after opting not to implement additional income levies, but eventually determined against the measure.

Financial institutions in the UK face a higher corporate tax level, which is above the normal rate, as well as a distinct tax on their British operations.