Obama to meet bank CEOs about ‘obligations’

 

     WASHINGTON – President Barack Obama will meet with about a dozen top bank chief executives on Friday, including executives from JPMorgan & Co, Goldman Sachs and Citigroup, two sources familiar with the matter said on Tuesday.

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.

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The sources did not speak on the record because the White House has not yet announced the meeting. 

 

“President Obama will … reiterate his belief that getting the economy back on track will require an understanding that each of us must look beyond our own short-term interests to the wider set of obligations we have to each other in order for America to succeed,” a White House official said.

Obama was scheduled to hold a news conference on Tuesday evening to explain his economic strategy to a recession-weary public angry over executive bonuses and concerned about the government’s direction.

JPMorgan declined to comment. Spokespersons for Goldman Sachs and Citigroup were not immediately available for comment.

It was not immediately clear what Obama plans to discuss with the top executives, but financial firms have been raising concerns about the restrictions attached to government aid.

Goldman Sachs is prepared to pay back the U.S. government’s $10 billion Troubled Asset Relief Program investment as soon as allowed by regulators, a person familiar with the situation said on Tuesday.

A growing number of financial firms that have received aid from the $700 billion TARP have said they plan to repay the money after lawmakers tagged on extra restrictions involving executive pay and dividend policies.

Wells Fargo & Co Chairman Richard Kovacevich said earlier this month that had the bank not been forced to take $25 billion in government aid, it would have been able to raise private capital and perhaps avoid a later dividend cut.

Federal Deposit Insurance Corp Chairman Sheila Bair said on Tuesday that banks should be allowed to repay TARP funds, saying that Treasury needs the resources and the government needs an exit strategy from the assistance it has provided to financial firms.

Bair said that banks who sell distressed assets as part of the government’s public-private partnership plan will not be subjected to TARP’s restrictions on executive compensation, dividends, and share repurchases.

Treasury officials also were careful to note that private investors who buy banks’ assets will not be subjected to executive compensation restrictions. 

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