CEOs of big banks face off with House Dems

The Tribune (SLO) - - Insight - BY KEN SWEET

NEW YORK

The heads of seven of the largest banks in the U.S. fielded some­times con­tentious ques­tions from a House com­mit­tee on Wed­nes­day, some deal­ing with cur­rent risks to the financial sys­tem and other fo­cused on more po­lit­i­cally-charged top­ics.

The ap­pear­ance by the chief ex­ec­u­tives of JPMor­gan Chase, Gold­man Sachs and five other banks rep­re­sented the largest gath­er­ing of lead­ers of the bank­ing in­dus­try be­fore Congress since the financial cri­sis.

The CEOs told mem­bers of the House Financial Ser­vices Com­mit­tee they’ve taken steps to im­prove the sta­bil­ity of their in­sti­tu­tions since the financial sys­tem nearly seized up in 2008. The banks have raised cap­i­tal, are more di­verse, have closed busi­nesses and are more re­silient than they were be­fore the financial cri­sis, the CEOs said.

The back­drop of this hear­ing is the 10-year an­niver­sary of the 20082009 financial cri­sis. The bank­ing sys­tem re­quired ex­tra­or­di­nary ef­forts by reg­u­la­tors – and a bailout by U.S. tax­pay­ers – in or­der to sur­vive. All seven banks ap­pear­ing in front of Congress re­ceived funds un­der the $ 700 bil­lion Trou­bled As­set Re­lief Pro­gram, and all paid bil­lions of dollars in penal­ties and fines for their be­hav­ior head­ing into the hous­ing bub­ble.

The hear­ing had some pol­icy ques­tions, but many mem­bers of Congress took their time to ask po­lit­i­cal­ly­charged ques­tions of the CEOs, on top­ics rang­ing from gun reg­u­la­tions to ex­ec­u­tive com­pen­sa­tion to cli­mate change. Democrats took their time to laud Bank of America and Cit­i­group’s de­ci­sion not to fi­nance gun man­u­fac­tur­ing com­pa­nies, while Repub­li­cans took their turns to lam­bast them. Democrats also fo­cused a sig­nif­i­cant part of their time on whether banks del­e­gated too much cap­i­tal to­ward stock buy­backs in­stead of rein­vest­ing in their in­di­vid­ual busi­nesses.

The hear­ing comes af­ter the bank­ing in­dus­try had a record year for profits in 2018, thanks partly to the tax cuts passed by Repub­li­cans in late 2017. Mean­while, the bank­ing in­dus­try’s lob­by­ists have been push­ing Congress to un­wind the rules and reg­u­la­tions put into place af­ter the 2008 financial cri­sis.

SARAH SIL­BIGER NYT

Jamie Di­mon, the chair­man and chief ex­ec­u­tive of JPMor­gan Chase, tes­ti­fies along­side other bank ex­ec­u­tives Wed­nes­day on Capi­tol Hill.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.