Wall Street bankers — so humble, so frugal!!!
It is amazing how the prospects of a grilling in Washington can make Wall Street’s CEOs behave. Until a little while ago, these were the masters of the masters of the universe. An elite group of highly paid stars who rarely showed signs of vulnerability, who rarely seemed to doubt their place at the top of the heap. But take a look at the testimonies they have prepared for today’s hearing at the House Committee on Financial Services and it looks like they have begun to embrace the new era, the new religion.
You would be forgiven in thinking they had all also hired the same speechwriter. They mostly stress they are prudent, frugal, humble, though not quite yet apologetic — it will be interesting if that changes once the grilling begins. Here are some of the themes:
Public anger towards Wall Street is justifiable:
“It is abundantly clear that we are here amidst broad public anger at our industry. In my 26 years at Goldman Sachs, I have never seen a wider gulf between the financial services industry and the public. Many people believe — and, in many cases, justifiably so — that Wall Street lost sight of its larger public obligations and allowed certain trends and practices to undermine the financial system’s stability.” — Lloyd Blankfein, CEO of Goldman Sachs Group.
“I know the American people are outraged about some compensation practices on Wall Street. I can understand why.” — John Mack, CEO of Morgan Stanley.
Bailout money from the government is not being used to reward bankers or executives (though they don’t quite explain how this is achieved):
“We have not used any of the government investment for dividends, bonuses or compensation of any kind — nor will we.” –John Stumpf, CEO of Wells Fargo.
“We have NOT used it to pay compensation — nor did we use it to pay any dividends or lobbying costs.” — John Mack, CEO of Morgan Stanley.
The government bailout money is being used for lending:
“We are still lending, and we are lending far more because of the TARP program.” — Kenneth Lewis, CEO of Bank of America.
There is a need for increased regulation, particularly of systemic threats:
“We need fundamentally improved systemic regulation.” –John Mack, CEO of Morgan Stanley.
“…in my view, long-term recovery will elude the financial industry unless we modernize our financial regulatory system and address the regulatory weaknesses that recent events have uncovered.” — Jamie Dimon, CEO of JPMorgan Chase & Co.
Greater transparency in the markets is desirable:
“We need greater transparency in our financial markets both for investors and regulators.” –John Mack, CEO of Morgan Stanley.
The government should be paid back as soon as possible:
“When conditions allow and with the support of our regulators and the Treasury, we look forward to
paying back the government’s investment so that money can be used elsewhere to support our economy.” — Lloyd Blankfein, CEO of Goldman Sachs Group.
“It’s our goal and our desire to repay the taxpayers in full as soon as possible.” — John Mack, CEO of Morgan Stanley
The previous ways of doing things don’t apply anymore:
“We understand that the old model no longer works and the old rules no longer apply.” — Vikram Pandit, CEO of Citigroup.
There are many efforts to keep defaulting homeowners in their homes:
“In the last year, we have kept approximately four out of five distressed borrowers whose mortgages we service in their homes. We have extended our foreclosure moratorium to help millions of other eligible homeowners whose mortgages we service.” — Vikram Pandit, CEO of Citigroup.
They are doing everything they can to restore confidence in the banking system:
“We are absolutely committed to doing our part — and working closely with the Congress, our regulators and our clients — to get the economy solidly back on its feet.” — Robert Kelly, CEO of The Bank of New York Mellon.
“I am pleased to be here today to assure the Committee that we at JPMorgan Chase are doing everything we can to help restore confidence in the U.S. financial system.” — Jamie Dimon, CEO of JPMorgan Chase & Co.
They are responsible and prudent:
“We do business and lend money the old-fashioned way — responsibly and prudently.” — John Stumpf, CEO of Wells Fargo.
They embrace frugality and humility:
“We are frugal. Last year, our overall corporate expenses actually declined one percent while our revenue rose over seven percent.” — John Stumpf, CEO of Wells Fargo.
“The real issue, I believe, is this: taxpayers feel, and rightly so, that if a bank is having sufficient trouble to require public support, all its financial decisions should signal a conservative, sober and frugal approach to the financial health of the company.” — Kenneth Lewis, CEO of Bank of America.
“The financial services industry is undergoing wrenching change. One thing we know is that we will be a smaller industry. And that’s not a bad thing. Obviously, the rapid growth of our industry in recent years was overdone. Now is a good time to remind ourselves that we play a supporting role in the economy — not a lead role. Our job is to help the real creators of economic value — people who make things, and people who use them — get together and do business. We bankers should find some humility in that.” — Kenneth Lewis, CEO of Bank of America.
(PHOTO: Chairman of the House Financial Services Committee Barney Frank (R) (D-MA) and ranking member Spencer Bachus (L) (R-AL) during questioning of Chairman of the Federal Reserve Ben Bernanke during a hearing on Capitol Hill in Washington February 10, 2009. REUTERS/Kevin Lamarque)