Wednesday
Feb112009
Executives try to keep egg off their faces
Wednesday, February 11, 2009 at 2:05PM
On Wednesday the heads of several of the largest lending institutions in the United States were called to testify before the House Financial Services Committee. All of the individuals testifying represented lending institutions which received financial assistance from the federal government several months ago under the Troubled Assets Relief Program (TARP). Committee members inquired about the use of the TARP money thus far.
Committee Chairman Barney Frank (D-Mass) said that the aim of the hearing was to adopt rules to make sure this situation did not happen again in the future, while restoring the system of extending credit in the United States. Frank said that although the hearing would focus on what transpired in getting the country into this situation, his committee would be “looking forward” at what progress can be made. Congressman Paul Kanjorski (D-Penn)said that when these lending institutions took taxpayer money, they “moved into a fishbowl”, and that all eyes are justifiably on how they use the money. Recent public outrage at the seeming misuse of taxpayer money in the form of executive compensation (anger which Chairman Frank called “justifiable”) has left many asking what role the federal government should play in overseeing the use of these funds to make sure that the taxpayer money is being used wisely.
Lloyd Blankfein of Goldman Sachs said that the TARP bill was important to maintaining the overall stability of the financial system. Most of the executives testifying said that their institutions are still lending, but after and extended amount of inquiry from committee members, it is uncertain if the TARP money has actually encouraged these institutions to lend more than they have in the recent and distant past, respectively. Jamie Dimon of JP Morgan Chase & Co. said that his company is committed to helping homeowners avoid foreclosure and stay in their homes. Vikram of Citi said that taxpayers have a right to expect a return on their investments, and said that he personally has volunteered to have his salary set at one dollar per year until the company returns to a profitable state. Chairman Frank asked the members of the lending community to withhold any new foreclosures until Treasury Secretary Tim Geichner’s program could be put into place, but at present it is uncertain whether than will happen.
By Michael Ruhl, University of New Mexico - Talk Radio News Service
Committee Chairman Barney Frank (D-Mass) said that the aim of the hearing was to adopt rules to make sure this situation did not happen again in the future, while restoring the system of extending credit in the United States. Frank said that although the hearing would focus on what transpired in getting the country into this situation, his committee would be “looking forward” at what progress can be made. Congressman Paul Kanjorski (D-Penn)said that when these lending institutions took taxpayer money, they “moved into a fishbowl”, and that all eyes are justifiably on how they use the money. Recent public outrage at the seeming misuse of taxpayer money in the form of executive compensation (anger which Chairman Frank called “justifiable”) has left many asking what role the federal government should play in overseeing the use of these funds to make sure that the taxpayer money is being used wisely.
Lloyd Blankfein of Goldman Sachs said that the TARP bill was important to maintaining the overall stability of the financial system. Most of the executives testifying said that their institutions are still lending, but after and extended amount of inquiry from committee members, it is uncertain if the TARP money has actually encouraged these institutions to lend more than they have in the recent and distant past, respectively. Jamie Dimon of JP Morgan Chase & Co. said that his company is committed to helping homeowners avoid foreclosure and stay in their homes. Vikram of Citi said that taxpayers have a right to expect a return on their investments, and said that he personally has volunteered to have his salary set at one dollar per year until the company returns to a profitable state. Chairman Frank asked the members of the lending community to withhold any new foreclosures until Treasury Secretary Tim Geichner’s program could be put into place, but at present it is uncertain whether than will happen.
By Michael Ruhl, University of New Mexico - Talk Radio News Service
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