Why does JPMorgan want a new building at Canary Wharf?

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JPMorgan has confirmed that it is planning to leave the City and move east to Canary Wharf.

In the first of what is likely to be a succession of costs related to the move, the bank is spending 237m ($350.9m) to acquire a plot of land on which it will erect the 1.9m square foot new building.

The move suggests a degree of schadenfreude in the current business environment. It also comes at a time when JPMorgan is also said to be lining up thousands of City job cuts.

According to observers, the move is partially down to cost. "In the long term, rents in Canary Wharf are a bit lower," Dan Bayley, head of UK office agency at broker Atisreal, told Reuters.

However, if costs are the issue, surely JPMorgan could slum it in the Lehman building, which itself is only a few years old? Or maybe it could occupy Bank of America's premises when and if it moves in with Merrill Lynch?

Given that Jamie Dimon has been pointedly negative about near-term economic risks, the new building option seems a costly path to take. It does, however, suggest that JPMorgan's European bankers are optimistic about the long term. Do you agree?

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