) -- In a wide-ranging interview published in an Italian newspaper on Friday,

JPMorgan Chase

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CEO Jamie Dimon lashed out at the U.S. government for unfair treatment and criticized new reform measures.

He also said the European Union must stand behind the sovereign debt of its troubled nations to avoid a "chain of events" that would create more financial distress.

The CEO was visiting Rome as his bank began new operations in Italy, according to

Il Sole 24 Ore

, a business publication. Dimon said that if the E.U. allows any country to default on its debt, it would cause "a chain of events" across Europe and possibly the globe.

"If a European state became insolvent and there were a default on its public debt, all of Europe would find itself having to save the banks that hold that sovereign debt," Dimon said, according to a translation of the interview, which was published in Italian. "I don't think it's the right strategy."

The interview turned into a soliloquy on perceived injustices against bankers and policy measures Dimon considers flawed. For instance, the CEO said he found it "strange" that banks were being blamed for states' default when they are, in fact, the largest holders of sovereign debt.

"I'll give you an example," he said. "When the American government gave $25 billion to us, at that same moment our bank was lending $100 billion to the American government because we held $100 billion worth of U.S. Treasurys. If you look at the balance sheet of a bank, it has an enormous amount of sovereign debt."

Dimon has indicated in the past that his bank was forced to accept $25 billion in bailout funds it didn't really need to avoid giving the impression that some competitors were weaker. JPMorgan Chase was among the first handful of banks allowed to repay the U.S. Treasury Department in June 2009.

Dimon also criticized entitlement programs in the U.S. and abroad that are making it difficult for countries to get their fiscal houses in order. For example, riots have occurred in Greece over benefit cuts and the French government had a difficult time passing unpopular fiscal reform measures. Students in the U.K. and Italy have protested added fees and cuts to assistance, while the U.S. Congress is currently engaged in a political brawl over how to balance the budget.

"In Europe, some people can get their pension at 52 and others have to wait until they're 65," said Dimon. "And then they expect European citizens who get their pension later to pay for those who get it much earlier. In the U.S., we have the same problem: Part of our fiscal deficit is legacy expense for health insurance and Social Security."

Nonetheless, Dimon was bullish on the prospects of mature economies. He said America's strength has been underestimated and that, despite its current financial woes, Europe's economy is still expected to grow around 1%. While it's "obvious" that countries like Brazil and China have faster growth, Dimon indicated that JPMorgan Chase is still bullish on Europe and America, simply because of their size.

"The fact that we invest in the emerging markets doesn't mean that we don't invest in Europe," said Dimon. "The United States and Europe are just as important. They remain the two biggest global economies, representing over 50% of total GDP."

Dimon also criticized new reform measures at home and abroad. He said bankers have been taxed unfairly and used as political scapegoats for the global financial crisis.

The 54-year-old New York City native, known for his "straight talk" manner, successfully led JPMorgan through the crisis, acquiring strained competitors and remaining profitable throughout. He told

Il Sole 24 Ore

that U.K. taxes on banker bonuses are "indiscriminate" and "unfair" and that he doesn't appreciate being blamed for the errors of other firms.

"It's unacceptable that for irrational reasons my company and the entire financial industry has to pay for mistakes we didn't make," said Dimon. "JP Morgan is paying $5 billion for the failure of small American banks."

He added that he eliminated the so-called "golden parachute" provision that allowed CEOs of failed banks to walk away with giant pay packages ahead of their collapse. It would be "right" for JPMorgan to claw back the bonus it gave Dimon three years ago if it emerged that he had "failed in his job," he said.

Dimon also noted concern that laws regarding derivatives may not be ironed out on an international basis. "It doesn't make sense to me to only ask American banks to move some derivative positions into separated legal entities without applying the standard in a coherent way on an international level," he said.

While Dimon thinks derivative clearinghouses are a good step to provide transparency, he is also concerned that customers will see higher costs and that regulators won't allow enough flexibility for the so-called over-the-counter derivatives market. OTC derivatives got a lot of financial firms into trouble and led to the largest U.S. bailout of

American International Group

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Dimon would prefer if banks handled new margins required for derivative end-users (rather than having customers pay clearinghouses directly) and says clearinghouses should be able to accept cash as well as sovereign debt and AAA-rated bonds. While the Dodd-Frank reform bill sketched out broad goals for derivatives reform, the granular rule-making is being left up to the Commodity Futures Trading Commission and Securities and Exchange Commission, as well as the Federal Reserve, which is in charge of overseeing systemic risk All of the regulators will have to answer to an oversight council whose chairman is the Treasury Secretary.

"With this reform we will have 10 new primary regulators," said Dimon. "We still don't know how they will work, how they will coordinate with each other and who will supervise their coordination."

-- Written by Lauren Tara LaCapra in New York


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