Obama pressures bank bosses

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Obama pressures bank bosses

Obama pressures bank bosses
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President Barack Obama has turned up the heat on the bosses of top US banks.

At a meeting at the White House he told them they were not giving enough loans to small businesses.

He said some banks had taken “small and positive steps” to improve lending but they needed to do more.

Obama also pointedly reminded them of the help the government had given.

After the 90 minute session he told reporters: “My main message in today’s meeting was very simple: that America’s banks received extraordinary assistance from American taxpayers to rebuild their industry and now that they are back on their feet, we expect an extraordinary commitment from them to help rebuild our economy.”

He also urged the banks to get behind legislation to overhaul financial regulation.

After the meeting, US Bancorp Chief Executive Richard Davis admitted banks had not done a good enough job of articulating their support for financial regulatory reform.

“We do support regulatory reform,” he told reporters and added that he agreed with Obama that there was a “disconnect” between what executives and bank lobbyists were saying about the issue.

Hours before the White House gathering, the third largest American bank, Citigroup, revealed plans to repay the money it owes the US government by selling new shares to raise the cash.

One reason it is doing that is to end the restrictions on executives’ pay imposed by Washington as a condition for bailing it out.

The bank is to sell 11.5 billion euros worth of new shares immediately, to repay the cash it got when it had to be rescued three times.

The US Treasury will start selling the roughly 20 billion euros of Citigroup shares it owns and end an agreement to guarantee around 170 billion euros of Citigroup assets.

The government estimates it could see a profit of as much as 9.6 billion euros from its investment in the bank.

Citigroup is one of the weakest of the large US financial institutions, and that fact that it is planning to repay the government bailout money may be a sign of broader economic recovery.