CEOs of big banks face off with House panel

Marco Green
April 13, 2019

Rep. Jim Himes, D-Connecticut, asked all CEOs what they considered to be the products or businesses most at risk in the banking system.

CEO Jamie Dimon came under intense questioning on Wednesday over the bank's relationships with gunmakers, and was asked if he'd consider implementing a formal policy limiting that business - as some of his peers have.

The CEOs talked about how economic growth is slowing across the globe, and again mentioned cybersecurity as a big risk to the banking industry.

The outspoken Dimon has often outsmarted his competitors and has remained at the head of JPMorgan since 2006. Among the CEOs on the panel, only JPMorgan's Jamie Dimon was at the helm of his bank before the financial crisis. Lloyd Blankfein, who steered Goldman Sachs through the financial crisis, retired previous year.

Representative Sean Duffy of Wisconsin was among the Republicans who balked at a retreat by major banks from financing gun makers, rebuking Bank of America's Brian Moynihan, who said the bank restricted financing of gun companies because of employees who had been personally affected by shootings.

One former top bank executive seems pretty happy he doesn't need to appear in front of Congress anymore. "Boy, I really miss my old job!", he wrote on Twitter. Because of scheduling conflicts, Wells Fargo & Co. sent then-CEO Tim Sloan to field questions by himself at a hearing before the same committee in March, where he endured more than four hours of questions about his efforts to fix consumer abuses.

Representative Maxine Waters, a California Democrat and chairwoman of the House Financial Services Committee, set the tone, hitting out at the industry’s "chronic lawbreaking" as evidenced by hundreds of billions of dollars in fines and settlements and also alluding to 2008 U.S. bank bailouts.

Wednesday's House hearing on banks was nominally about determining how much safer the financial system is, but few finance committee members are raising the subject.

The hearing was led by Democratic Representative Maxine Waters and staffed with some high-profile freshman representatives like progressives including Alexandria Ocasio-Cortez.

Since the crisis, the country's largest banks have added more than $800 billion in capital to bolster the financial system.

"There is no doubt that the strength, stability and resiliency of the financial system has been fundamentally improved over the course of the last ten years", Dimon said.

The bank executives had prepared remarks arguing that Wall Street has reformed the practices that fueled the crisis and to stress the contribution banks make to the broader economy, testimony released on Monday showed.

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 almost seized up in 2008.

In one of the more probing exchanges, Nydia Velazquez, a Democrat of NY, pressed Citigroup Chief Executive Michael Corbat to justify his 2018 pay of $24.2 million, an estimated 486 times that of the average employee. "You did well with deregulation with the last Congress", she said, cautioning banks not to push too hard and overwhelm the panel with further suggestions on easing rules, or to seek relief directly from regulators.

Other reports by Click Lancashire

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