Bank CEOs voice support for Obama's economic plans
WASHINGTON (Reuters) - President Barack Obama won support from top bankers on Friday for his efforts to rid financial institutions of bad debts, but differences remained over broader U.S. plans for the financial industry.
Chief executives from Wells Fargo, JP Morgan Chase and other financial giants met Obama at the White House and echoed his call for cooperation to help the economy.
But their statements about tough trading conditions in March overshadowed the positive spin the executives and the White House sought to give to the meeting.
"The basic message is we're all in this thing together," Wells Fargo Chief Executive John Stumpf told reporters after the meeting, with other bank executives at his side.
Obama, in an interview later with CBS News, said he told the bankers they should be more sensitive to how Wall Street's actions look to the rest of the country.
"Show some restraint," he said he told them. "Show that you get that this is a crisis and everybody has to make sacrifices."
Obama saw the meeting as productive and frank, White House spokesman Robert Gibbs said, adding the president stressed the importance of dealing with "toxic assets" -- bad loans many banks are stuck with thanks to the collapse of the U.S. housing market.
"The president opened up by talking about the importance of dealing with toxic assets and getting banks lending again," Gibbs told a briefing.
The meeting came just days after the U.S. Treasury Department provided details on a government plan to cleanse banks' balance sheets of up to $1 trillion in distressed loans and securities, a plan the banks will have to support in order for it to work.
White House advisers said the president wanted to get a snapshot of the economy from the banking chiefs, and the message they sent was lukewarm.
"March was a little rough," said JPMorgan Chase Chief Executive Jamie Dimon. Bank of America's Ken Lewis said his institution's "trading book for March was not as good" as it was the first two months of the year.
The comments pushed bank stocks and the overall market lower.
The White House meeting came ahead of next week's G20 summit, at which Obama is expected to pitch his plans to rescue the recession-hit U.S. economy to fellow world leaders.
BONUSES, TARP MONEY
The executives, who have often found themselves bearing the brunt of Obama's criticism about the financial mess and the bonuses many executives in the struggling industry accepted, said not all issues were agreed upon at the meeting.
One hot topic involves government bailout funds and executive compensation limits.
Financial analysts are concerned that if healthier banks return government money to get out of newly imposed executive pay rules, weaker banks that cannot afford to return the funds will be stigmatized.
Dimon said Obama did not instruct the bankers to stop considering an early return of some of the bailout funds that they received as part of the government's $700 billion rescue plan for the financial industry.
Disagreements aside, the two sides acknowledged the need for regulatory reform. "It's fair to say that they agreed on the need to update the framework of regulations," Gibbs said.
The Obama administration announced on Thursday its plan to rewrite financial rules, including creating a single regulator to monitor any firm whose failure could threaten the financial system.
Officials said executive compensation was discussed, although it did not dominate the conversation, and bankers indicated a public outcry over the issue had sunk in.
"We know mistakes were made" around executive compensation, JPMorgan's Dimon told CNBC after the meeting. Bank of America's Lewis said everyone understood the "golden age" of bank pay was over.
About 15 chief executives attended, according to the White House, including Lloyd Blankfein of Goldman Sachs and Vikram Pandit of Citigroup.
Others on the list included chiefs from Freddie Mac, Bank of New York Mellon, Northern Trust, PNC Financial, State Street, Morgan Stanley, American Bankers Association and Independent Community Bankers.