Amerikaanse bankiers hebben de boodschap nog niet door

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

- Excessieve beloning niet uitgebannen (integendeel: slechte persoonlijke
belegging van management Goldman is door Goldman afgekocht - dit is
kennelijk voor hun géén belangen tegenstelling)
- Stress test van banken wordt door hun als onnodig gekraakt.
- Aan de ene kant wordt medewerking beloofd aan public-private
partnerships, aan andere kant wordt gezegd dat banken gezond genoeg zijn
om leningen government terug te betalen.
- FED chairman Ben Bernanke was niet aanwezig bij overleg? (anders dan in
de vorm van plagerig knijppopje als geschenk voor Obama)
- scheiding tussen commercial and investment banking (Glass-Steagall Act)
werd niet ter tafel gebracht?

Groet / Cees

PS. De Glass-Steagall Act van 1933 werd in 1999 herroepen met genoeg
stemmen om veto van Pres. Clinton teniet te doen: Senate 90-8 (1 not
voting) House: 362-57 (15 not voting). Dus óók met meerderheid van
Democratische stemmen (dus lobby banken heeft goed werk geleverd).
Wikipedia: The repeal enabled commercial lenders such as Citigroup, which
was in 1999 then the largest U.S. bank by assets, to underwrite and trade
instruments such as mortgage-backed securities and collateralized debt
obligations and establish so-called structured investment vehicles, or
SIVs, that bought those securities. It is believed by some that the repeal
of this act contributed to the Global financial crisis of 2008–2009,
although some maintain that the increased flexibility allowed by the
repeal of Glass-Steagall mitigated or prevented the failure of some
American banks.
The year before the repeal, sub-prime loans were just 5% of all mortgage
lending. By the time the credit crisis peaked in 2008, they were
approaching 30%

http://online.wsj.com/article/SB123816459546857301.html
Bankers, Obama in Uneasy Truce

By JONATHAN WEISMAN, DAMIAN PALETTA and DAN FITZPATRICK - MARCH 28, 2009
[Top Bank CEOs Pledge Cooperation]

WASHINGTON -- The nation's top bankers walked away from a summit with
President Barack Obama pledging broad support for his bank-bailout program
and efforts to revive the economy, but the meeting failed to resolve
tensions over executive pay and the president's tough rhetoric of recent
weeks.

The highly unusual meeting, which came after weeks of public feuding
between Democrats in Washington and banks, brought President Obama face to
face with 15 of the nation's top bank executives, including the heads of
J.P. Morgan Chase & Co., Bank of America Corp., Wells Fargo & Co.,
Citigroup Inc. and Morgan Stanley. All of the banks have received federal
bailout cash -- in some cases after being told they must -- and some have
openly bristled over mounting public criticism of their pay and their
banks' lending.

That was one topic of discussion Friday at a meeting all sides described
as cordial. According to participants, some of the chiefs told the
president they want to return their bailout money later this year, but Mr.
Obama told them that regulators would permit such a move only if the banks
were truly healthy. This account of the meeting is based on interviews
with participants, White House aides and others familiar with the
gathering.

For his part, Mr. Obama told the group that bankers should be more modest
in their compensation and spending practices, participants said. The
bankers responded that the administration should try to cool its anti-Wall
Street rhetoric.

The economy was also discussed, attendees said, with Bank of America CEO
Kenneth Lewis and Northern Trust's Rick Waddell expressing cautious
optimism that the downturn is either at or near the bottom of the cycle.
There was agreement that despite the tension of recent weeks, the White
House needs investors to implement its banking and housing programs, and
the financial system needs the government for capital.

"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,"
Mr. Lewis said after the meeting. But "at some point you have to stop
focusing on the past, and focus on the present."

Said Robert Kelly, CEO of Bank of New York Mellon: "Our interests are very
much aligned with the administration's."

The meeting, held in the White House East Wing, was no-frills: The bankers
were served no food, just offered glasses of water. But there were a few
touches that aimed at lightening the mood. J.P. Morgan CEO James Dimon
jokingly offered Treasury Secretary Timothy Geithner a check for $25
billion -- the amount his bank owes the government.

Camden Fine, head of the Independent Community Bankers of America, gave
Mr. Obama a foam Ben Bernanke doll and suggested the president squeeze the
Federal Reserve chairman during stressful moments.

The backdrop of the meeting was as notable as its content. Many
participants have been openly hostile toward Democratic initiatives in
Washington.

Two weeks ago, in a speech at Stanford University, Wells Fargo & Co.
chairman Richard Kovacevich called the administration's new bank stress
tests for Troubled Asset Relief Program recipients "asinine." On Friday,
Wells Fargo was represented by its CEO, John Stumpf, who didn't apologize
for the bank chairman's comments but did emerge from the White House to
declare: "The basic message is, we're all in this together."

A president who has made a public display of shunning lobbyists seated the
heads of two financial trade groups at the meeting. The president entered
the room a few minutes late, after making a round of calls to the
governors of North Dakota and Minnesota and the mayor of Fargo, N.D., to
discuss the Red River flood.

Mr. Obama sat at the center of the long table, with Mr. Geithner on one
side of him and Christina Romer, chairman of the Council of Economic
Advisers, on the other. Across from them were National Economic Council
director Lawrence Summers and White House senior adviser Valerie Jarrett,
who heads business outreach.

The president talked up his efforts to overhaul financial regulations and
give more power to an agency to oversee risks in financial markets. He
appealed to the chief executives to see their bonus payments through the
prism of Americans struggling to make ends meet. He noted he was the first
new president not to redecorate the Oval Office. "There are still stains
on the carpet," he said.

The president turned to Mr. Dimon of J.P. Morgan Chase for his opinion of
the economic situation, according to White House aides and meeting
participants. Mr. Dimon said banks alone weren't responsible for the
financial crisis, citing also the cost of the war in Iraq, the ballooning
trade deficit and volatile energy markets. He praised the administration's
financial plan so far, calling it an "overwhelming force" of action.

Mr. Dimon also argued that more regulation, as Mr. Geithner proposed
earlier this week, isn't necessarily the right way to go. "The question
isn't more or less," Mr. Dimon said. "The question is [whether it is]
good."

Several bankers said their institutions will be healthy enough to pay back
most, if not all, the bailout funds by the end of this year, a pledge the
president greeted cautiously. Mr. Obama made clear he didn't want banks
emptying their coffers to get out from under the strictures of the
Troubled Asset Relief Program if that meant paring back their lending.

The bankers pledged to work constructively with the administration on a
host of fronts, from selling bad assets to proposed new public-private
partnerships to overhauling the financial regulatory system. CEO Richard
Davis of U.S. Bancorp later called that system "old, antiquated and kind
of creaking."

Mr. Lewis said he would be in a position to pay back TARP money later in
the year. He mentioned some encouraging comments made recently by West
Coast customers of his bank as an example of how the downturn could be
nearing a bottom.

CEO James Rohr of PNC Financial Services Group Inc. said he told the
president his Pittsburgh-based bank's loans were up in the fourth quarter,
and "we are very much in the lending business." Mr. Rohr said the
president "did not ask us to make loans we wouldn't otherwise make, which
is good."

Goldman Sachs Group Inc. chief Lloyd Blankfein expressed greater caution
than some about the economy's near-term future. He warned of the
difficulty in harmonizing administration policies such as fiscal stimulus
spending with those of other countries, especially in Western Europe where
inflation concerns limit government's room for maneuver.

Separately, a regulatory filing Friday showed that Goldman spent $58
million to buy two of its top executives out of some of the firm's
unprofitable in-house funds. The buyouts were at an undisclosed discount
to the funds' current value.
—Robin Sidel, Aaron Lucchetti and Susanne Craig contributed to this article.

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