Obama Prods Bankers to Do More to Revive U.S. Economy
President Barack Obama met with the heads of the nation’s biggest banks Monday in Washington and urged them to increase lending and embrace financial reform.
“The way I see it, having recovered with the help of the American government and the American taxpayers, our banks now have a greater obligation to the goal of a wider recovery, a more stable system, and more broadly shared prosperity,” the president said.
Mr. Obama, who last met with top bankers in the spring, said he did not want to vilify a particular industry or micromanage its executive compensation practices. Rather, he said, he wanted to ensure more stability for consumers and the economy as a whole by making sure that credit is flowing, businesses can grow and jobs are “created at the pace we need.”
The president prodded the bank CEOs in what he called “a candid and productive meeting” to increase lending to qualified small- and medium-sized businesses and to not inhibit financial regulation reform from advancing in Congress.
On Friday, the House passed legislation that would restructure financial regulations. Mr. Obama said bank lobbyists have tried to thwart reform efforts and said it is in the banking industry’s interest to have modern rules.
President Obama acknowledged Citigroup’s Monday morning announcement that it will repay $20 billion in taxpayer money, becoming the last of the large Wall Street banks to leave the government-funded bailout program.
“A year ago, many doubted that we would ever recover these investments, but we’ve managed this program well,” the president said. “This morning, another major bank announced that it would be repaying taxpayers in full, and when they do, we’ll have collected 60 percent of the money owed — with interest.”
Outside the White House, US Bancorp CEO Richard Davis said after the meeting that banks had not done a good enough job of articulating their support for financial regulatory reform.
“We do support regulatory reform,” he said, adding that he agreed with Mr. Obama that a “disconnect” existed between what executives and bank lobbyists were saying about new regulation.
Steve Bartlett, CEO of the Financial Services Roundtable, which represents some of the largest financial companies, released a statement after the meeting praising the “open and constructive dialogue” taking place between bankers and the Obama administration to open up lending for consumers and businesses and pass “meaningful regulatory reform.”
“We need a financial system that provides market stability and integrity, yet encourages innovation and competition to serve consumers and meet the needs of a vibrant and growing economy,” Bartlett said in the statement. “That is the shared goal that the administration and industry are working towards.”
In recent weeks, the White House has sharpened its rhetoric toward the financial industry. The president said he told the bank CEOs he had no intention of allowing lobbyists for the institutions to thwart financial reforms legislation.
“If they are willing to fight common sense consumer protections, that’s a fight I’m willing to have,” he said, according to Reuters.