Wednesday, March 25, 2009

Obama meeting with Bank CEO's on Friday

This should be interesting, since the White House has toned down its rhetoric towards the very folks that put us in the predicament we are in.

President Barack Obama plans to meet Friday with about a dozen of the U.S.'s top banking chiefs in an unusual gathering designed to discuss the administration's plans to shore up the financial sector. Attendees are expected to include Goldman Sachs Group Inc. (GS), Morgan Stanley (MS), J. P. Morgan Chase & Co. and Citigroup Inc. (C). The meeting comes as relations between Washington and Wall Street are frayed following last week's furor over bonuses paid to American International Group Inc. (AIG) employees.

At the same time, the administration is relying heavily on private investors and Wall Street banks to implement its various rescue programs and needs to repair its relationship.

(This story and related background material will be available on The Wall Street Journal Web site,

Several bank chief executives have openly criticized the White House's handling of the financial crisis, especially its public announcement of "stress tests," designed to measure banks' financial health, that led to a sharp sell off in financial stocks.

Top bank executives often come to Washington but rarely meet privately en masse with top government officials. It is also unusual for the White House to hold such meetings, which are usually handled by the Treasury or Federal Reserve.

Last fall, then-Treasury Secretary Henry Paulson summoned many of the same top bank executives to Washington and pressured them to allow the government to inject capital into their companies. The meeting Friday is expected to be much less contentious, representing instead an effort by Mr. Obama and his top aides to explain efforts he recently announced to stabilize the banking industry.

Many of the executives will arrive Thursday for a meeting of the Financial Services Roundtable, an industry trade group that represents the largest financial-services companies. The group plans to meet privately with Treasury Secretary Timothy Geithner Thursday night.

Separately, U.K. Prime Minister Gordon met Tuesday with executives from 13 global banks as part of preparations for the Group-of-20 summit in London April 2. A spokesman for the U.K. Treasury said "there was clear agreement about the importance of supporting the global economy, restoring lending by dealing head-on with troubled assets and rejecting protectionism."

Executives meeting with Mr. Brown came from banks including Banco Santander SA (STD), Barclays PLC (BCS), Deutsche Bank AG (DB), Goldman Sachs and Mitsubishi UFJ Financial Group Inc. (MTU).


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