WASHINGTON — President Barack Obama is hearing from the chief executives of some of the country’s biggest banks as he caps a week in which he rounded out his overall plan for stabilizing the financial system.
WASHINGTON — President Barack Obama is hearing from the chief executives of some of the country’s biggest banks as he caps a week in which he rounded out his overall plan for stabilizing the financial system. The president was taking the temperature of the bank CEOs on Friday at the White House, the latest in a series of such meetings he has had with financial industry representatives and business executives since taking office amid the worst economic downturn since the Great Depression. Treasury Secretary Timothy Geithner also will attend the meeting with the 15 chief executives. Jamie Dimon of JPMorgan Chase & Co., Vikram Pandit of Citigroup Inc., Ken Lewis of Bank of America Corp., John Stumpf of Wells Fargo & Co., John Koskinen of Freddie Mac and Kenneth Chenault of American Express Co., were among those in the meeting, according to the White House. The meeting follows a period marked by Obama’s sharp language, and public outrage, over Wall Street excesses and $165 million in employee bonuses by American International Group, the large but troubled insurance company that has taken more than $170 billion in federal bailout money. It also comes days before Obama attends his first international summit, a meeting in London next week of the world’s 20 major and developing economies, all struggling with the global recession. This week, the administration unveiled its program to help banks clear their balance sheets of so-called "toxic assets," bad investments that are tying up capital and making it difficult for them to lend money. The administration also outlined its proposals to impose tighter regulations on the financial sector in an effort to avoid a repeat of the industry meltdown that contributed to the recession. Obama in recent days has dialed down his rhetoric against AIG and Wall Street. The administration needs the industry’s cooperation for its financial stability and financial regulation plans to work. White House officials said Obama likes to hear directly from those who will be affected by his decisions. "Our future is inextricably linked to these financial institutions, and their future is linked to the economic health of the country," said Valerie Jarrett, a senior adviser to Obama. Press secretary Robert Gibbs said Obama looked forward to getting an update from the bankers on the activity they are seeing in real estate and commercial loans. They also are likely to discuss "stuff that’s been in the news" in the past few weeks, including executive compensation, bonuses and "the notion that … we have to change the culture of the way Wall Street works," he said. Asked whether Obama would deliver as tough a message in private as he has in public, Gibbs said the president would. "The president isn’t going to say one thing out here and a different thing in there," he said. "We’re not going to get out of this financial crisis and we’re not going to stabilize our financial system without healthy banks. That’s part of what he hopes to talk to them about." Larry Summers, Obama’s chief economic adviser, said the meeting will focus on a broad approach to restoring the economy. This week, the administration announced a plan to partner with private investors, the Federal Reserve and the Federal Deposit Insurance Corp., to take over up to $1 trillion in sour mortgage securities from banks. The goal is to help jump-start lending. The administration also has proposed tighter regulation of the financial system, including giving the government broad power to take over major financial institutions that are not banks, such as insurance companies, like AIG, and hedge funds teetering on the brink of collapse. Last week, Obama assailed AIG for "recklessness and greed" in its business practices. He softened his tone a bit during a nationally televised news conference Tuesday night, saying the country "can’t afford to demonize" every profit-seeking investor or entrepreneur because that is what fuels prosperity, and is what will get banks lending and the economy moving again. ______ Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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