CEOs of big banks face off with House Dems
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.
Jamie Dimon, the chairman and chief executive of JPMorgan Chase, testifies alongside other bank executives Wednesday on Capitol Hill.