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The top executive of JP Morgan Chase has given final approval on a massive £3 billion new tower in London following guarantees from government representatives about business-friendly measures.

Timing of Developments

The major US bank, which along with Goldman Sachs announced substantial investment plans right after escaping additional levies in the Treasury's autumn budget, only gave final approval recently.

This approval followed a visit to the United States by Varun Chandra, who conferred with the JP Morgan chief to discuss commitments about the business environment.

Financial Background

The meeting happened shortly prior to the Treasury announced revenue-raising measures in a economic plan that exempted financial institutions from additional taxes, after significant pressure from the banking industry.

"The investment ... would potentially been canceled if this economic statement had been regarded as hostile to financial services."

Development Information

On Thursday morning, JP Morgan announced plans to develop a massive building in Canary Wharf, which will function as its main London office and house a significant portion of its 23,000 UK staff.

The company stressed that the project would rely on "favorable economic conditions in the UK".

Economic Impact

The bank has stated that the investment could bring substantial economic value to the British economy over the next six years.

The Treasury chief commented positively about the investment, referring to it as a "massive endorsement in the British economic prospects".

Broader Perspective

A representative aware of the bank's investment strategy noted that the investment choice was "influenced by various considerations" and that "no one could know whether financial institutions were going to be taxed before the budget".

The JP Morgan chief commented that the "British authorities' focus of financial development has been a key consideration in influencing our this determination".

Parallel Announcements

A second financial institution announced that it would increase its Midlands operation and hire new employees, in a initiative that would significantly increase its staffing levels in the UK's second biggest city.

The Treasury had examined expanding the financial sector tax in the UK, as it explored ways to raise revenues after deciding against higher personal taxation, but finally concluded not to do so.

Banks in the UK are subject to a higher corporate tax level, being exceeding the typical percentage, as well as a additional charge on their domestic financial positions.