Chief executives of the nation's biggest financial institutions
emerged from a meeting with U.S. President Barack Obama pledging to
cooperate with the administration's effort to steer the economy out
of its mess.
Executives said the tone of the more-than-90-minute session was
open and cordial, with little discussion of the controversy over
executive compensation.
"We're just in this together. There's still some hard work to
do, but a pleasant meeting," said Bank of America Corp. (BAC) CEO
Ken Lewis.
White House spokesman Robert Gibbs called the get-together a
"good, productive and frank conservation."
The CEOs agreed they had to make clear that they understood the
public's concern over taxpayer-funded bailouts, according Freddie
Mac (FRE) CEO John Koskinen. The executives, however, said
government programs need firm rules that do not change with the
political winds.
"Whatever the rules are going to be, we need to know them sooner
rather than later because we are prepared to play by the new
requirements but we need to know what they're going to be," he
said.
The bankers said they support the proposal unveiled this week by
Treasury Secretary Timothy Geithner to cleanse their balance sheets
of toxic assets, though they are waiting for more specifics of the
plan.
"We don't know all the details ... but we think it's a really
encouraging first step to get the plan out there," said Robert
Kelly, CEO of Bank of New York Mellon Corp. (BK). "We need to hear
the details. I think there's going to be a lot of interest in
it."
Richard Davis, CEO of U.S. Bancorp (USB), said a proposal to tax
firms that accept government aid wasn't discussed at the meeting,
despite widespread public outrage - and administration rhetoric -
over the bonuses doled out to executives at American International
Group Inc. (AIG).
"We understand there have been some optics that have been very
negative. We apologize for that because it's not something that
this industry supports or wants," Davis said.
Gibbs said the session touched on the toxic asset plan executive
compensation issues, and a revamp of the U.S. regulatory system. He
said Obama was "very pleased" with the meeting and hopes to keep
the lines of communications open with Wall Street.
"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," Gibbs said.
Yet the furor over AIG's bonuses has sparked concerns that
banks, worried about government interference in their compensation
schemes, may stop participating in the TARP and other government
programs. The White House is eager to keep financial institutions
involved, but is sensitive to anti-Wall Street sentiment.
The president appealed to the bankers' patriotism, urging them
to help the country by boosting lending and helping people get into
more affordable mortgages, the executives said. There was little
talk of the details of the federal rescue funds received by the
industry and whether some banks would seek to return the funds
early, they said.
Asked whether the large financial services firms owed the public
an apology for their role in creating the financial mess, Lewis,
said, "I think there are very few financial institutions who would
not say we've made mistakes and that we feel awful bad about the
mistakes we have made."
However, he argued it was time to stop dwelling on the errors
and work to fix the economy: "At some point you have to stop
focusing on the past, and focus on the present." Lewis disputed
that he favored reinstating a law that separated commercial from
investment banks. He had made remarks coming into the meeting to a
reporter that he said were misconstrued. "I think a bank that
brings all things to bear is the right way to go," he said.
The thrust of the president's message to the bank executives,
Koskinen said, was that the government and the financial industry
needed to work together to steer the economy to recovery.
"No one in that room gave any indication at all that they were
anything other than enthusiastic about supporting the president and
this program," Koskinen said.
Bank of America's Lewis, when asked if his firm planned to
return government funds it received under the Troubled Asset Relief
Program, said it was premature to make that decision because banks
are still undergoing government-administered stress tests.
JPMorgan Chase & Co. CEO Jamie Dimon told CNBC that his bank
doesn't have a timetable for returning funds it took from the
Trouble Asset Relief Program.
The meeting included JP Morgan's Jamie Dimon, Bank of America's
Lewis, American Express Corp. (AXP) CEO Ken Chenault, Freddie Mac's
(FRE) Koskinen, State Street Corp. (STT) CEO Ronald Logue,
BONY-Mellon's Kelly, Northern Trust CEO Rick Waddell, PNC Financial
Services Group Inc. (PNC) CEO James Rohr, Goldman Sachs Group Inc.
(GS) CEO Lloyd Blankfein, Morgan Stanley (MS) CEO John Mack,
Citigroup Inc. (C)CEO Vikram Pandit, Wells Fargo & Co. (WFC)
CEO John Stumpf, and USBancorp's CEO Richard Davis.
Cam Fine of the Independent Community Bankers and Edward
Yingling of the American Bankers Association also attended the
session.
-By Henry J. Pulizzi and Jessica Holzer, Dow Jones Newswires;
202-862-9256; henry.pulizzi@dowjones.com