WASHINGTON (CNN)– The chief executive officers of eight of the nation's largest banks will defend the use of hundreds of billions of dollars in bailout money to lawmakers on Capitol Hill Wednesday.
The CEO's of Bank of America, JP Morgan Chase, Citigroup, Goldman Sachs, Wells Fargo, Morgan Stanley, Bank of New York and State Street Corp. recently came under scrutiny after being accused of using bailout money from the Troubled Asset Relief Program to fund bonuses and lavish vacations.
"American people are right to expect that we use funds responsibly, quickly and transparently to help American families, businesses and communities," Vikram Pandit, CEO of Citigroup is expected to say before the House Financial Services committee, according to prepared remarks. "They also have a right to expect a return on this investment."
Recently the ailing bank received $45 billion in government bailout money which Pandit will explain that $35.6 billion has gone toward new programs and "lending initiatives."
"We have every incentive to lend," Kenneth D. Lewis, Chairman and CEO of Bank of America is expected to say Wednesday. "And, despite recessionary headwinds, we are lending."
Bank of America is expected to make its first return to the Treasury next week of $400 million according to Lewis.
"We intend to pay all the TARP funds back as soon as possible," Lewis is expected to say.
Sharing a common theme as the new Obama administration, each of the executives plan to harp on accountability and transparency, while defending their use of the capital.
"We have not used [TARP funding] to pay compensation, nor did we use it to pay any dividends or lobbying costs," John J. Mack, Chairman and CEO of Morgan Stanley is expected to tell the committee.
Lloyd C. Blankfein, Chairman and CEO of Goldman Sachs, which received $10 billion of capitol is expected to say the company has already dedicated $13 billion in new financing since October 27.
"While the firm produced a profit of $2.2 billion in 2008, our revenues were down considerably," Blankfein is expected to say, according to prepared testimony. "Compensation across the firm, dictated by our policies and practices, reflected that. End of year bonuses were down on average 65 percent," with more senior members being down "approximately 75 percent."
The underlying message each executive will convey is the understanding of the "serious responsibilities" the banks undertook when they negotiated with the Treasury Department and their full cooperation and intent to repay each dollar.
This meeting comes a day after Treasury Secretary Tim Geithner announced a plan to overhaul TARP to in part tighten the terms of further aid to banks and demand greater accountability. Last week, the administration unveiled a plan to restrict CEO pay at firms receiving government assistance.
Sniffit February 11th, 2009 10:00 am ET
@ Capt. Smash
Get used to it…the blithering idiots in the GOP are so mad that the country told them to go eff themselves on November 4, 2008 that they'll blame the next hurricane on a Obama fart.
Why not, everything was Bush's fault.
Sniffit February 11th, 2009 9:59 am ET
Just switch these CEOs with Michael Phelps in his now-famous picture and stick the first $350B in TARP money in the bong instead of the weed. That's what's went on when the Bush administration failed to supervise and place conditions on the TARP money.
Also the democratic congress!
Congress is using the bank execs as an evil to distract people from their own incompetence and failure.
The money given to the banks wasnt only to encourage them to lend but to shore up their capital positions. Congress and the executive branch knew exactly what the banks would do with the money.
People give far to much credibiltity to the press, which just parrots what they are told by sources in the government. How about a little intelligence from the press corps? Maybe its too much to expect from a journalist that they actually know something about which they report...
Lots of morons on this post blasting the CEO's.
I hope you are not looking for a job.
The problem is Barney and the Dems, but we can't say that, probably can't post that either.
CNN post this