President Barack Obama met with the chief executive officers of several of the nation's largest banks, including Bank of America and PNC Friday - a meeting that the White House described as both productive and frank.
White House Press Secretary Robert Gibbs, who did not attend the meeting but spoke with Obama afterwards, said the meeting touched on a wide variety of subjects.
The President opened up by talking about the importance of dealing with toxic assets and getting banks lending again, Gibbs said. There was a discussion about the President's and the administration's plan to deal with housing that many of the bankers discussed positively.
The bankers also viewed the administration's efforts to overhaul the financial regulatory system in a positive light, Gibbs said, as well as potential legislation to limit salaries of top bankers at institutions receiving taxpayer money.
It's fair to say that they agreed on the need to update the framework of regulation and that being important, Gibbs said. Also discussed were issues of compensation and the importance of recognizing what the American public is going through in this economic crisis. The President emphasized that Wall Street needs Main Street, and that Main Street needs Wall Street; that everybody has to pitch in; that we're all in this together.
He added, Overall, the President was very pleased about the meeting [and]continued to stress the need for open lines off communication, and also to stress that . he had no agenda beyond working to get a solution, the right solution, for our financial system and to get it stabilized and working again for the American people.
Gibbs said that Obama and the bankers also discussed the Treasury Department's new initiative to help banks get so called toxic assets - primarily complex financial products bundling portions of many sub-prime mortgage loans - off of their balance sheets to facilitate further lending.
Treasury has proposed a public-private investment program that would partner taxpayer funds with private investors, with the FDIC providing additional leverage, to set up auctions for these assets. The plan is designed to minimize the risk to taxpayers while allowing them to share in any profits the assets ultimately recoup.
Many people have talked about the need for the financial system to be stabilized by getting a lot of these toxic assets off the balance sheets of bankers, and that because of that, there's an incentive through the market to get a price that's established that works for both investors and for those that want to rid their balance sheets of these assets, Gibbs said.
He added, The policy is structured so that there is that incentive, and obviously the President believes that -- and I think the bankers said after the meeting -- that what they've heard is a positive first step.
Gibbs also noted that the bankers were particularly pleased with the administration's efforts to stabilize the housing and mortgage markets.
Mortgage finance rates have hit a low -- are at their lowest point since they began recording statistics, I believe, in 1971, Gibbs said. Millions are taking advantage of the ability to refinance their home [and] banks are adding people to their employment rolls in order to process those refinancing.
He added, We're still facing a lot of tough challenges; these are unprecedented times. There are figures here and there that demonstrate good news -- spending figures today, the discussion of the housing plan. But obviously all the people in that room recognized that we have quite a long ways to go.
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