Jamie Dimon, the chief executive of JPMorgan Chase, bitterly criticised Washington lawmakers yesterday, deriding their sluggish decision-making and describing the political system as suffering from “institutional sclerosis [...] unable to make a decision to make this country healthy”.

His attack came hours after his bank had been forced to sell a stake in itself to the US Government, following the announcement of President Bush's plans to partially nationalise America's biggest financial institutions.

It also comes after Wall Street watched with disbelief as lawmakers argued over and sought to block the $700billion (£401billion) rescue package designed to crack America's frozen credit markets.

Speaking at the Harvard Business School in Cambridge, Massachusetts, Mr Dimon also criticised the notion that all business people were corrupt and overpaid - accusations that have been levelled at Wall Street since the implosion of the US banking system forced Washington to use taxpayers' money to bail out financial institutions.

Many on Capitol Hill have expressed anger at having to use taxpayers' money to bail out bankers who have received huge salaries and bonuses in the past.

Mr Dimon said: “There is a belief that somehow every business person is corrupt. Some of these companies are more charitable and more honest than the average congressman.”

However, he conceded: “A lot of people made a lot of money who did not deserve it. That is a fact.”

Mr Dimon, who has been tipped as a favoured candidate to be the new US Treasury Secretary in the event that Barack Obama, the Democratic presidential hopeful, wins next month's election, also attacked other Wall Street executives.

Speaking at the business school from which he graduated 20 years ago, he accused some of his rivals of failing to act quickly enough when it became obvious that America's banking system was experiencing intolerable strain.

Mr Dimon said: “I am shocked at the number of people who were just looking at the train coming down the tracks and were still worrying about whether they had a strategic plan for 2009. We cancelled all that. We cancelled all trips, all travel. We needed to have a sense of urgency and a lot of people did not have the ability to act.”

While Mr Dimon did not refer to any specific individuals, Dick Fuld, the chief executive of Lehman Brothers, the bust investment bank, was widely criticised for failing to break up the financial group quickly enough and raise new capital.

Lehman Brothers, which was allowed to collapse by federal authorities, was the most heavily exposed of all the Wall Street banks to toxic mortgage-backed securities.

By contrast, JPMorgan Chase is perceived as one of the strongest banks in America. In February Henry Paulson, the US Treasury Secretary, asked it to take control of the failing Bear Stearns. Seven months later Mr Dimon was entrusted to take over Washington Mutual, the American retail bank that collapsed last month.

Mr Dimon also criticised Wall Street for devising such complex investments as collateralised debt obligations (CDOs). Speaking to more than a thousand bankers, he said: “CDOs squared? What the hell were we thinking? These things were way too complicated.”

Addressing the problem of banks with distressed assets, he said: “These problems do not age well. You have to have a lot of fortitude, to make the right decision and take the pain.”

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