WORLD> America
|
WORLD> America
|
|
Bank execs vow to work with Obama on recovery plan
(Agencies)
Updated: 2009-03-28 09:49 Chief executive officers from some of the largest banks of the United States told President Barack Obama that they will work with him to revive the US economy and agreed that financial-market regulations need an overhaul. "We're all in this together," John Stumpf, the CEO of Wells Fargo & Co., told reporters outside the White House after meeting with Obama today. "We're trying to do the right thing for America."
Obama is seeking support for his plan to stabilize the financial system and move beyond the furor over bailouts and bonuses. Along with Stumpf, the CEOs he met with included Jamie Dimon of JPMorgan Chase & Co., John Mack of Morgan Stanley, Vikram Pandit of Citigroup Inc. and Lloyd Blankfein of Goldman Sachs Group Inc. The meeting began with a discussion about the need to deal with toxic assets on bank balance sheets and to increase lending, then moved on to Obama's plan to resolve the housing crisis, his proposals for revamping regulations and executive compensation, White House press secretary Robert Gibbs said. They agreed on the need to update the framework of regulation. Regarding bonuses and pay, Obama emphasized to the executives the importance of recognizing what the American public is going through in this economic crisis. Getting Back on Track "The president made it clear that he'd like this country to get back on track," Dimon told Bloomberg Television after today's meeting. "He wants us all to help." While executives said that they understood financial regulations needed revamping, they had different prescriptions for new rules. Obama is proposing an overhaul that would affect banks, hedge funds, private-equity firms and derivatives markets "Anyone who's subject to the regulatory scheme that we've had up to this point can't be happy with the state of regulation," Blankfein said in an interview with Bloomberg Television afterward. "It is an alphabet soup of agencies." Still, bringing back Depression-era regulations, such as one separating investment banking from commercial banking, would be difficult, Blankfein said. "It's hard to turn back the clock," he said. The Glass-Steagall Act that separated deposit-taking institutions from investment banks was overturned in 1999 with the passage of the Gramm-Leach-Bliley bill. Banking Separation Bank of America Corp. CEO Kenneth Lewis said before the meeting that there probably should be a separation between commercial lenders and investment banking activities. Asked what he would tell Obama, Lewis said it would be that "commercial banks are the fabric of any community in which they operate and we probably need to separate the commercial banks from the investment banking activities." Lewis said later that he was talking about the rhetoric, not physically separating the two. The executives also brought up repaying the government for capital doled out under the $700 billion Troubled Asset Relief Program. The bailouts have been increasingly unpopular with voters, and the administration has tightened rules on executive compensation for institutions that got the funds. |
