- The Washington Times - Saturday, March 28, 2009

Chief executives from the nation’s top banks Friday acknowledged to President Obama during a White House meeting that they have made mistakes with excessive bonus pay and pledged to do better, but they also urged him not to rush reform of financial regulation.

Mr. Obama brought the 15 CEOs to the White House for a noon meeting in the State Dining Room with himself and Treasury Secretary Timothy F. Geithner. No lunch was served, but the president did instruct the executives that they needed to be mindful of the economic pain being experienced by everyday Americans.

Mr. Obama “reminded the CEOs around the table that there was real public anger over some of these bonus practices and that the CEOs needed to understand that we are in tough times and the public is really upset over some of these practices,” said Camden R. Fine, president and CEO of the Independent Community Bankers of America, who attended the meeting.

The president “appealed to the CEOs to really take a look at their bonus and compensation practices and do what they could to bring some moderation to it,” Mr. Fine said.

“I don’t know that every CEO spoke, but most of them acknowledged that there probably had been mistakes made in recent years and they more or less did a mea culpa and said we take responsibility for that, but moving forward we will do what we can.”

The discussion came one week after the House passed a bill that would tax 90 percent of executive bonus pay at financial institutions receiving federal bailout money. After that vote, Mr. Obama on Sunday appeared on CBS’ “60 Minutes,” where he signaled that such legislation should not move forward in the Senate.

But Mr. Obama did say he would “communicate to Wall Street that, given the current crisis that we’re in, they can’t expect help from taxpayers but then enjoy all the benefits that they enjoyed before the crisis happened.”

“The flip side is that Main Street has to understand, unless we get these banks moving again, then we can’t get this economy to recover,” Mr. Obama said in that interview.

It was this latter message that the bankers were all too happy to repeat over and over after emerging from their meeting in the White House to talk to a large crowd of reporters.

“We know we’re at the sharp end of the stick in terms of bringing our economy back. We want to see the American recovery. We’re all working hard to make it happen,” said Robert Kelly, CEO of Bank of New York Mellon.

“At some point, we have to stop talking about the past and talk about the present, and talk about all the great things that commercial banks are doing in their communities,” said Ken Lewis, CEO of Bank of America, which has received $45 billion in taxpayer-funded bailout money from the Troubled Asset Relief Program, passed last fall by Congress.

Richard Davis, CEO of U.S. Bancorp, which has received $6.5 billion from the TARP, was so intent on talking about “changing the dialogue” that he denied the bankers had even discussed bonus pay with the president.

“Executive compensation was not part of the discussion. We appreciate the fact that that’s a winnowing point of interest for the press, and it’s certainly something we’re sensistive to,” he said. “We are responsible in some part for some of the sound bites that have come out along the way, so we take ownership for that, but we’re going to move forward to give you better things to write about.”

Mr. Davis lauded “people in new houses, new buildings being built, new companies starting up and hiring new people.”

Unemployment, however, has passed 8 percent nationally, and more than 12 million Americans are unemployed.

The bankers, during the meeting with Mr. Obama, agreed that the current financial regulatory system is in need of updating, but they asked him and Mr. Geithner to “take it slowly and not rush to reform the system,” Mr. Fine said.

They urged that regulatory reform should be “thought through, that there are many complexities … it’s a complex subject and they should be deliberate on how they proceed.”

Bankers were cautiously optimistic about Mr. Geithner’s plan to form a public-private partnership to help their institutions get toxic assets off their books, a proposal that the secretary unveiled Monday.

“We think it’s a really encouraging first step to get the plan out there. We need to hear the details. I think there’s going to be a lot of interest in it,” said Mr. Kelly, whose bank has received $3 billion in TARP money.

A handful of bankers spoke in support of a systemic risk regulator like the one proposed Thursday on Capitol Hill by Mr. Geithner, while several executives expressed no opinion, Mr. Fine said.

Goldman Sachs CEO Lloyd Blankfein, meanwhile, cautioned Mr. Obama that he will receive strong pressure from European heads of state next week at a global summit in London to agree to regulatory changes on a worldwide level that the bankers would not be in favor of, Mr. Fine said.

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