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.
The Democrats created this economic mess, and now they're going to make it worse.
"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 claims. True? And where did the money come from to pay these bonuses and lobbying costs? Customer accounts?
Is that Botox Nanzi in the back ground????All that fine picture is missing is Reid, Dodd and Obama the pride of the democraps
Lucy you have some explainin to do!!!
We have no idea how they are using or plan on using the money, but we do know that they haven;t hired any workers back... they aren't making new loans or extending credit, actually many are eliminating or decreasing credit abruptly.................
I want to hear from them from behind bars.
It's too late to do anything about the banks that has ripped us tax payers off...................Our congress are a bunch of idots!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
This should be good....plenty of material for Jay Leno
These Banks better start owning up to how their are spending our money. I'm sick of all the foolishness, it's about time banks STEP UP and tell the American people WHAT they did with our billions!!!!
NO MORE MR. NICE GUY, SHOW ME THE MONEY!!
SHOW ME THE MONEY!
SHOW ME THE MONEY
OTHERWISE, GIVE ME MY MONEY BACK..
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.
No, you used the money that should have gone into the company to help it regain its financial strength. In-the-mean-time, your custmers are still paying high interest on their loans along with the on-going foreclosures with NO (ZERO) help to the very people that made and continue to make your companies sooooo wealthy.
The bottom line is; you folks tried to sqeeze every penny you could from the profits you made from your customers by re-selling your loans as secured investments. You sold them to each other and the world, while telling a lie each time you sold them.
Now, by the grace of God and the strong-arming of the tax payers by the government, they get another chance. How do they thank us? They reward themselves and call us stupid.
Barney Frank seems to be spearheading much of the recent silly, populist rhetoric, which puts our banking system at even greater risk.
Not every single person on Wall Street dealt with mortgages, or traded risky securities!! If the government continues putting artificial constraints on how much securities industry professionals can get paid, they further erode the country's tax base, and put such institutions at an even bigger threat of collapse (either because people leave and/or they stop working 80 hours a week). Democrats – think before you speak!!!!!!
The fact that they are laying off workers and giving themselves bonuses, even if reduced, speaks volumns to me about their priorities, morals and ethics. These people remind me of tobacco executives that got up before Congress and swore to a man that " they believed use of tobacco was not adictive and caused no cardio-pulmonary diseases." There are many questions I would like to ask these people about how they use public monies in relation to non-public monies.
After reading this article, I still don't understand how these banks did not use any of the TARP money to pad the bank accounts of thier executives, unless they were lying about being broke. No bonuses under any circumstances shoul dbe given untill they have repaid every penny of tax payers money.
I am amazed at the way these CEO's wasted OUR money.
Rep Frank, Please hold the CEO's feet to the fire if they have not properly disbursed the funds they received as it was intended to be used. If they have done wrong some heads need to roll and some prison time need to be looked at as a possibility.
sure they are...they got caught with their greedy hand in the perverbial cookie jar.....
Citigroup is full of crap. I have a line of credit with them and they sent a letter explaining they were reducing my credit limit. I had not been late on a single payment for them or any other creditor. The customer rep told me they were doing that to everyone. Yet, they are supposed to be lending more money! I knew when they were going to give them money with "not strings attached' that they weren't going to do the right thing. The American people already knew this, why didn't our leaders know this...BIG MISTAKE!
Interesting that these CEO's have to appear before Barney Frank, one ofthe orchestrators of this recession. Of course all they need to do to stay in the clear is make sure Barney's taken care of. Interesting, what Frank was doing to male pages he's now doing to decent, hard-working Americans.
Oh, and to Rob in Detroit Mi., from the Dolly story yesterday, nice try pinhead, I actually work (more than I can probably say for you), and can see Obama, and the Dems running that sham of a Congress for the socailists they are. Tell me, when you watch the re-broadcasts of the Obama show, I mean press conference on Monday, do you sit there with your pants off, fantasizing that he's just talking to you? You are delusional and far removed from reality.
"We have met the enemy, an' they is us!" (Pogo cartoon, circa 1960s). Not sure, however, if the "enemy" is Wall Street or inept elected/appointed officials.
Did anyone watch Morning Joe this morning on MSNBC? Joe Scarborough was such a blabbering idiot. He had no idea what the hell he was talking about. He blamed the 381-point drop in the stock market yesterday on Treasury Secretary Tim Geithner.
Thank God the Market went down yesterday. It actually was a good thing mortgage rates got better by a half of a percentage point. Joe Scarborough needs to understand when the stock-market tumbles mortgage rates get better. We need low mortgage rate that’s what is going to turn this economy around.
The real reason the market went down yesterday is because those banks that are no longer viable are going to be shut down, and they are scared they are real scared.
The stimulus package is a good thing that will bring more money into the market place and create jobs! The people that get these jobs will buy homes, products, goods and services. That will create more jobs and more jobs and so on.
It shouldn't be problem for the bank CEO's.
In Obama's address on Monday, he said that Bush's policy in Iraq was the correct one, resulting in a "functioning democracy".
Then he said that he would extend Bush's policy into Afganistan (no timeline, no withdrawal,etc.).
So all the bankers need to do is say what Obama said: "No change".
Accountability is good. No one is saying these firms should not make their money. All we want is for them to pay us back our money and give us a return on our investment, like any good shareholder would.
Does the taxpayer have a right to be a part of the hearing and ask quesitons? Who is accepting the questions to be asked, on behalf of the taxpayers? Personally, I think every taxpayer concerned about the abuse of their dollars should send a question in. It's my opinion those that sit high in these position both privately and in government have no real concept how enraged the taxpayer is.
A mere word feast. Show me the books.
Sure wish all my tax maoney was like that..