Obama, with a toughness in tone usually reserved for ultimatums to the likes of Iran, said that a year after the government stepped in to save the financial industry from "a predicament largely of their own making," he expects banks to take extraordinary measures to provide the loans needed to help the economy recover.
"I'm getting too many letters from small businesses who explain that they are creditworthy, and banks that they've had a long-term relationship with are still having problems giving them loans," Obama said after meeting with the chiefs of JPMorgan Chase, Goldman Sachs and others. "We think that's something that we can -- that can be fixed. And so I urged these institutions here today to go back and take a third and fourth look about how they are operating when it comes to small-business and medium-sized-
The president, a day after taking a slap at "fat-cat bankers on Wall Street" in an interview with "60 Minutes," also made clear he wants financial-industry lobbyists to stop resisting Capitol Hill efforts to impose rules on banks and other lenders aimed at avoiding the problems and poor risk management that led to last year's financial meltdown and broader economic crisis.
"If they wish to fight commonsense consumer protections, that's a fight I'm more than willing to have," Obama said. He added that meeting participants told him they support financial regulatory reform. "The problem is, there's a big gap between what I'm hearing here in the White House and the activities of lobbyists on behalf of these institutions or associations of which they're a member up on Capitol Hill. I urged them to close that gap."
At a time when Obama faces stiff opposition from elsewhere in Washington and across the country on a health care overhaul and an escalation of the war in Afghanistan, the White House knows it has broad public support for a clash with bankers widely blamed for the recent recession. And Wall Street knows it, too.
Bob Kelly, chairman and chief executive of Bank of New York Mellon, said after the meeting that the discussion had been "frank and candid" -- terms diplomats often apply to stormy arms-control talks behind closed doors. But Kelly and others who attended the talk with Obama suggested the problem was a "disconnect"
"Today we realized we're under the microscope to show" banks are taking every step to help the economy, Richard Davis, chairman and CEO of U.S. Bancorp, told reporters outside the West Wing. "We have to be better at telling our story."
Asked about the "fat cat" remark, Davis described the meeting with the president as more congenial: "He didn't call us names. It was productive."
Obama said he isn't interested "in vilifying any one person or institution or industry," and that he doesn't want to "dictate to them or micromanage their compensation practices." But the president also condemned executive-pay practices at financial firms that have outraged many Americans and exacerbated criticism of government support for the banks. "Many have begun to follow our lead in shifting from paying huge cash bonuses to awarding long-term stock, which will encourage more prudent decision-making,"
Wall Street's "bonus culture," as European Central Bank chief Jean-Claude Trichet put it Friday in London, has been widely blamed for the faulty risk calculations traced to the financial crisis. http://www.onthesource.com/
Obama, too, assailed the kind of short-term thinking that led banks to do deals that improved quarterly results while eventually pushing them to the brink of insolvency.
Although banks have rushed to repay aid from the Troubled Asset Relief Program in part to free their executives from government pay limits, Obama welcomed the return of the controversial cash to the Treasury. Citigroup on Monday became the last of the financial giants to announce it was repaying TARP loans, about $20 billion in government aid that was the subject of tense negotiations with the Federal Reserve and Treasury -- where officials feared the bank might be risking further financial problems down the road.
From: http://www.onThesource.com
