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Feb 11 Following are quotes from a U.S. House Financial Services Committee hearing on Wednesday about billions of dollars in taxpayer money given to eight banks in an attempt to unfreeze U.S. credit markets.
Testifying at the hearing were the chief executives of Citigroup (C.N), Bank of America (BAC.N), Morgan Stanley (MS.N), JPMorgan Chase (JPM.N), Goldman Sachs (GS.N), State Street (STT.N), Wells Fargo (WFC.N) and Bank of New York Mellon (BK.N). Together, the eight banks have received $176 billion in federal aid since October 2008.
REP. MICHAEL CAPUANO, MASSACHUSETTS DEMOCRAT:
"You come to us today on your bicycles after buying Girl Scout cookies and helping out Mother Teresa and telling us 'we're sorry, we didn't mean it, we won't do it again, trust us.' Well, I have some people in my constituency that actually robbed some of your banks and they say the same thing."
"America doesn't trust you any more... I don't have one single penny in any of your banks -- not one.... I don't want my money put into CDOs and credit default swaps and humongous bonuses."
VIKRAM PANDIT, CHIEF EXECUTIVE OF CITIGROUP:
When asked by a lawmaker what the government could do to help stabilize the market, Pandit said: "It really is about GDP and unemployment -- we need to arrest that... we have to stabilize housing. It started with housing and we need to fix it."
"There is also an issue of confidence. I don't have a formula to fix confidence."
"We will pay back the government TARP (Troubled Asset Relief Program) funds but I don't know if the rest of the program is going to be useful to us or not," Pandit said, referring to the Treasury Department's new bank rescue plan.
REP. SPENCER BACHUS OF ALABAMA, SENIOR REPUBLICAN ON THE PANEL:
"It's important that we don't engage in name calling or in a blame game."
"These are several different institutions... some wanted the money, some didn't want the money," he said. "I think they (the public) are going to look at you as a unit."
REP. RANDY NEUGEBAUER, TEXAS REPUBLICAN:
Neugebauer coined a new term in referring to the eight banks as "TSEs" or taxpayer-supported entities. "I think we can call this a shareholders meeting."
KEN LEWIS, CHIEF EXECUTIVE OF BANK OF AMERICA:
"I feel more like corporal of the universe, not captain of the universe."
Lewis said he would be willing to declare a moratorium on home foreclosures if it was for a definite time period. "We're being very aggressive in doing modifications with (homeowner) loans that we service."
"This is not an issue of liquidity. Our company has never been this liquid in our history."
REP. BARNEY FRANK, CHAIRMAN OF THE HOUSE COMMITTEE:
Frank asked the executives to explain why they had received bonuses in the past. "If you weren't getting a bonus, would you leave early on Wednesday? Or take longer lunches?... Why do you need to be bribed to have your interests aligned with the people who are paying your salary?.... Why do you need bonuses -- can't we just give you good salaries?"
Frank later told the executives to submit to him an international comparison showing how much chief executives are paid in the banking industry. "You have to prove to me that you're really at risk there."
REP. JEB HENSARLING, TEXAS REPUBLICAN:
"What you do with your money is your business, what you do with the taxpayer money is our business."
REP. BRAD SHERMAN, CALIFORNIA DEMOCRAT:
"Taxpayers were screwed to the tune of $78 billion, much of it by the the firms represented here," he said, referring to a report last week by a congressional watchdog panel that calculated the Treasury Department overpaid by about $78 billion for preferred and other securities in the banks.
Sherman then asked if the eight CEOs would recommend their boards issue additional preferred shares and warrants to the U.S. government to make up the shortfall. "Let the record show no hands went up and all the witnesses are content to leave a situation where the taxpayers have been undercompensated to the tune of $78 billion dollars."
REP. GRESHAM BARRETT, SOUTH CAROLINA REPUBLICAN:
"You owe my constituents an explanation of how you got yourselves into this position and what you're doing with their money."
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