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| Bank of America Chief Executive Officer Kenneth Lewis, right, leads the way as chief executives leave the White House in Washington, Friday, March 27, 2009, after a meeting between chief executives and President Barack Obama. From left are: Wells Fargo Chief Executive Officer John Stumpf; Morgan Stanley Chief Executive John Mack; US Bank Chief Executive Officer Richard Davis; and Lewis. |
WASHINGTON (AP) -- Top executives of the nation's biggest banks said Friday after meeting with President Barack Obama that they will work with the administration on its economic recovery plans, but want more specifics from the White House. In an interview with CBS News, Obama said his overarching message was this: "Show some restraint. Show that you get that this is a crisis and everybody has to make sacrifices. They agreed and they recognized it. Now, the proof in the pudding is in the eating."
Bankers said an administration proposal to jump-start lending, a problem at the heart of the industry's crisis, is encouraging.
"People are looking at that. It's positive," Morgan Stanley's John Mack told The Associated Press in an interview. "We think it's the right thing to do and now we just need to get the details."
The administration announced a program this week to help banks free themselves of so-called toxic assets. These investments have tied up capital and kept them from resuming more normal lending to consumers and businesses.
The plan calls for the administration to partner with private investors, the Federal Reserve and the Federal Deposit Insurance Corp. to buy as much as $1 trillion in toxic assets from banks. But one concern is whether private investors will participate and whether banks would be willing to sell the assets at the reduced prices they will be offered for them.
Bankers described a positive meeting and pledged to work with Obama on restoring the economy's health.
"We want to see the American recovery," said Robert Kelly, of Bank of New York Mellon Corp.
Obama invited chief executives from the 15 largest banks to the White House to discuss the economy and other issues.
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 who attended. Treasury Secretary Timothy Geithner met privately with the CEOs on Thursday night, and sat in on Friday's meeting.
Obama urged the CEOs to deal with their toxic assets. Obama and the executives also discussed the administration's plan to stem the rise in home foreclosures, its proposal for tighter regulation of the financial industry, executive compensation, the financial bailout program and the "importance of recognizing what the American public is going through in this economic crisis," White House press secretary Robert Gibbs said.
Gibbs said Obama generally was pleased with the meeting. It lasted more than an hour.
"The president emphasized that Wall Street needs Main Street and Main Street needs Wall Street," Gibbs told reporters.
He said the president stressed "that he had no agenda beyond working to get a solution, the right solution for our financial system and to get it stabilized and working again for the American people."
The administration also has proposed tighter regulation of the financial system. That includes giving the government broad power to take over major financial institutions that are not banks, such as American International Group, the giant insurer whose collapse would threaten the entire system, administration officials have said.
AIG has received several infusions of federal bailout money, more than $170 billion in all, because the administration says its failure would have far-reaching and devastating consequences around the world.
Gibbs said "it's fair to say that they agreed on the need to update the framework of regulation."
Obama also has announced a program to help millions of homeowners refinance their mortgages to avoid foreclosure.
Friday's meeting capped a period marked by public outrage and Obama's sharp language over Wall Street business practices and $165 million in bonuses that financially struggling AIG paid to some employees.
Obama last week assailed AIG for "recklessness and greed" in its business practices, but he has since toned down his rhetoric. The administration needs industry cooperation for its economic plans to work.
Richard Davis, of U.S. Bancorp, said Obama raised issues that have fueled the public's outrage.
"He's not surprised by it. We reported back to him that we're not surprised either," Davis told the AP.
