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.
From CNN Politics
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What a Merry Band of Thieves-Starting with the biggest one of all FRANK!
Where is the OUTRAGE?
Why aren't these Thieves behind Bars?
Could it be that our new Prez is the leader?
Barney Frank is one disgusting individual. Please refrain from posting any photo of him.
barney Franks, the man who single handedly cause this financial crisis has the nerve to to stick his head out and complain, he should be in prison with cris dodd and fritz shumer.
Those crooks should be Made to PAY BACK THAT MONEY!
What's there to defend? Personal aggrandisement over public good? They all ought to be ashamed of themselves for continuing to live a high life at public expense while the vast majority of Americans suffer.
Every single penny that Barney Frank owns should be seized and given back to the taxpayers!
This is simply free advertising for bankers to say how great they are and helping our nation AKA complete bullstuff!!!
Fire all these idiots if we are bailing them out, the American people should have ownership over the banks.
that mustache is actually chocolate residue from the box of Lindt he had prior to this meeting
Kimberly, you are the joke! You remark that Paulson gave away the money, read the other comments, the people are talking about who caused the problem, BARNEY FRANK and his cronies. You are a left wing nut! Thank God the entire Democratic party is not made up of people like you.
Barney Franks, Dodds, Waters, Meeks, Clay and Davis...... should be removed from their jobs.... just like Blagovich. They are responsible and we are suppose to trust them now.
Google .... 2004 Congressional Hearing Fannie Mae and Freddie
In their own words.... tanked this economy.... they knew in 2004.
We have to be sure that this bailout isn't too top heavy. It doesn't matter how much money the big wigs start dishing out if there's no steady market to support the cash flow.
1. How are the banks calculating a "loss" on home mortgages??
the banks collected interest for many years when the mortgage payments were being made and the banks collected costs from loan processing...where's the loss???
2. Since many people are not spending but are saving (putting their money into saving accounts), what are the banks doing with the money in savings accounts since the banks are not lending the money???
thank you
A $500,000 compensation cap for these larcenists is way too high. These CEO's should work for $1 per year until all the government money is repaid.
Barney Fife Frank needs to defend himself. He and Chris Dodd refused to regulate the mortgage industry. They forced banks to allow people with 540 credit scores to get loans.
The entire collapse is Barney Franks fault.
Barney
What do you know about Banking? We need to get someone in Congress that understands banking. It is time to set term limits for these guys in Congress.
The US Congress is a joke.
Barney Frank is a lousy congressman. He is more worried about diddling his interns than he is about fixing the problem he caused.
It is very easy for him to blame the bankers. He allowed the bankers to do it. This whole collapse has been coming since the Clinton years. Barney refused to fix it. His cronies at Fannie Mae and Freddie Mac made the money.
Anonymous February 11th, 2009 10:25 am ET
Capt. Smash February 11th, 2009 9:13 am ET
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.
That statement proves you probably do even know what's in it. Looser
______________________________________________________
Don’t mock someone's knowledge when you can’t even spell loser right!
WHY is Barney not in jail????
Think about this bailout...the American taxpayer should get a good hunk of our money now!! Don't those politician realize who needs it more because without taxpayers who would pay their huge paychecks and unreal retirement funds, they don't have to worry about the money. If the taxpayers have no money, no job, no home and no food who will bailout those rich political thieves then? I'm sick of them telling us how they want us to live and wait to see if the money they spend so freely gets back to the taxpayers who should have been paid something first.! After all it is OUR money! We are the stimulating part of all that happens. To me, this is just another way for our government getting control us by lowering our standard of living enough so we will take anything and everything they hand us. They in Washington should get pay cuts, as long as this recession is hurting the American taxpayer, they don't need cost of living raises because most taxpayer don't get any raises let alone cost of living raise. We are now hurting so bad we don't know if we will be living on the street next...its not too far away if our jobs don't start coming back soon! Oh and they need to stop NAFTA now!!
Look up "tapeworm syndrome",if you really want to know where the money is going.
I'll bet we can find some smart, experienced CEOs in India who would manage our corporations from Asia as telecommuters. They would work for less pay I'm sure and I have a feeling that they would do just as good a job. And, we don't have to provide fancy CEO perks like health insurance, private jets, "seminars" in luxury hotels, and $15,000 Persian carpets in their offices.
What have we got to lose by trying?
Listen up ! Listen up!!.....
Take my words, After 1 year all this Bail-Out Money would be gone.
These banks will asking for more and more, because:
1. The Operating Costs of these Banks are more than their earnings.
2. These Banks are Unregulated, they make their own Lending
Rules, and they know how to Short Cut Government Regulations.
3. Their Banking transactions are not Audited by Independent
Agency / Govt.
4. These Banks fool the Public, because the Public is Needy, Lacks
Awareness and are Innocent.
5. The Banking Laws do not have Sharp Teeth to Punish for
Corruption.
6. These Banks Spend excessive money on Advertisement and
Promotion, which is a waste and counter productive, because, this
money is squeezed out of hard pressed business, who are not
benefitted.
7. These Banks Lend and Spend, which dead money, because it
does not generate economy, manufacturing, exports. This money
is spent mostly on Luxury and Entertainment.
8. These Banks are like Termites that are Eating up our Economy.
God Save our Economy from these Banks.
How about the gov. just start their own bank with our tax money and start loaning out to us the people. I think this would start to turn the economy around overnight. We would save a lot just on CEO bonuses. Let the private banks fend for themselves like the free market intended. Those that can pull out of the mess they put themselves in good;other wise goodbye. If the private banks had to compete with a Nation Bank maybe they would rein in their bonuses and other excesses.
Your legislators voted to give out the money without any restrictions.
If you voted to reelect those legislators,
this is YOUR fault.