Obama to tell bankers "we're all in the same boat"

By Jeff Mason and David Lawder

WASHINGTON (Reuters) - President Barack Obama will tell bankers on Friday "we're all in the same boat" while pressing them to support his strategy to unlock credit markets ahead of next week's G20 meeting of world leaders.

Obama, who has proposed wide-ranging financial regulatory reforms as part of his plan to lift the country out of recession, has walked a fine line with bankers -- chastising them for taking big bonuses while encouraging them to increase lending to help turn the economy around.

He will discuss his administration's multi-faceted agenda at a meeting with a handful of chief executives from top financial institutions including JPMorgan Chase & Co, Goldman Sachs and Citigroup on Friday.

Spokesman Robert Gibbs said the president would seek the executives' input on how the economy is developing.

"The president looks forward to getting an update on what they're seeing happening in the economy," Gibbs said on Wednesday of the banking chief executives who are slated to meet with the president later this week.

He said Obama's message at the meeting would be to say that what is good for Wall Street is good for Main Street.

"We're all in the same boat," Gibbs said. "We have to understand that ... what is good for one has to be also good for the other."

The U.S. Treasury has invested more than $180 billion in government capital from the $700 billion financial bailout fund approved last year into the 11 banks attending the meeting.

Other invited financial institutions, according to a financial sector source, include: Fannie Mae, Freddie Mac, Bank of New York/Mellon, Northern Trust, PNC Financial, State Street , Bank of America, Morgan Stanley, USBancorp, Wells Fargo, American Bankers Association and the Financial Services Roundtable.

The meeting will come just days after the U.S. Treasury Department provided details on a government plan to cleanse banks' balance sheets of up to $1 trillion of distressed loans and securities.

It also comes as Obama prepares for next week's meeting of leaders from the Group of 20 emerging and industrialized economies, which will try to coordinate their strategies to address the global economic crisis.

REASSURING WORDS

Douglas Elliott, a Brookings Institution fellow and former JPMorgan investment banker, said he believes Obama will want to encourage banks to keep government bailout money and boost lending, while bankers will express concerns about being vilified and punished with new restrictions in the wake of public fury over recent American International Group bonuses for employees of the unit that nearly caused the company's collapse.

"The bankers have a feeling that they are the poster boys for evil right now," Elliott said.

"They believe this is harmful and they're trying to do their part and solve their problems, so they will express their fears that Congress will do punitive things to them."