Fallout: The Financial Crisis

CEOs bank on meeting to reshape image

Marketplace Staff Mar 27, 2009
HTML EMBED:
COPY
Fallout: The Financial Crisis

CEOs bank on meeting to reshape image

Marketplace Staff Mar 27, 2009
HTML EMBED:
COPY

TEXT OF STORY

KAI RYSSDAL: Although it might’ve been more interesting to be sitting in the Oval Office today. President Obama had a sit-down with the guys he needs to help get the country out of this recession, also known as big Wall Street bankers. CEOs from JP Morgan Chase, Citigroup, Bank of America and a dozen others were at the White House today. The president asked for the meeting as an opportunity to try to find some common ground. Marketplace’s Jeremy Hobson reports from Washington that it was an opportunity for the bankers, too.


Jeremy Hobson: The meeting was meant, in part, to be a kumbaya moment. And if you believe the bankers, it was.

Wells Fargo CEO John Stumpf: The basic message is we’re all in this thing together.

U.S. Bank CEO Richard Davis: We’re delighted that he brought us into the White House to talk about this economy.

But behind all those smiles is a festering wound. Bankers have been beaten up over executive compensation. Did the president use this meeting to voice the American people’s frustration? Here’s White House Press Secretary Robert Gibbs:

ROBERT GIBBS: Also discussed were issues of compensation and the importance of recognizing what the American public is going through.

Doesn’t seem like Richard Davis of U.S. Bank was at the same meeting.

DAVIS: Executive compensation was not part of the discussion.

Either way, bankers are hoping this high profile visit with a popular president will help them shed their thorny image. Charles Gabriel of Capital Alpha Partners says President Obama seems willing to play along in return for the help he needs from the banks.

CHARLES GABRIEL: Obama’s trying to lock the banks into committing to make the public-private investment funds work, while perhaps asking banks to tread carefully in withdrawing from TARP.

In other words, the president wants the banks to sell their toxic assets — excuse me, legacy loans — for less than they think they’re worth. And he still wants as many banks as possible to take TARP money to shield the ones that really need it.

GABRIEL: But it all starts with stopping the demonization of banking industry CEOs. So bankers seemed very relieved as they exited the White House.

Relieved but maybe not entirely satisfied. The president appears to have passed on the usual photo op with his potentially toxic visitors. Perhaps “we’re all in this together” will take a little getting used to.

In Washington, I’m Jeremy Hobson for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.