Lawmakers grill bank CEOs over TARP
Eight CEOs of the largest banks receiving TARP funds were grilled by the House Financial Services Committee. Where were the former CEOs who got us into this mess? Nancy Marshall Genzer reports.
Executives from financial institutions that received TARP funds testify before the House Financial Services Committee. From left, Goldman Sachs Chairman and CEO Lloyd Blankfein; JPMorgan Chase CEO and Chairman Jamie Dimon; The Bank of New York Mellon CEO Robert P. Kelly; Bank of America CEO Ken Lewis. (Chip Somodevilla/Getty Images)
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KAI RYSSDAL: It wasn't all stimulus all the time in Congress today. The House Financial Services Committee threw itself a nice little barbecue, grilling eight big bank CEOs over their roles in the financial crisis. The witnesses tried to be contrite. They acknowledged how angry people are over the state of affairs. But it's worth asking this question. The men who were at the witness table are the ones who still have their jobs. Which at least implies that they're not the worst offenders. So where were the ones who got fired? Marketplace's Nancy Marshall Genzer reports.
NANCY MARSHALL GENZER: The bank CEOs squirmed as lawmakers demanded to know where government bailout money went -- or simply vented. Here's California Democrat Maxine Waters:
MAXINE WATERS: Let me just say to our captains of the universe who are sitting before us that I have been in disagreement with the banking community.
But that community also includes former bank CEOs. You know, the guys who snapped up securities backed by wobbly subprime loans, and bet that housing prices would never go down.
John Steele Gordon is a financial historian.
JOHN STEELE GORDON: These guys should certainly be called to testify as to what they did and why they did it.
They made a mess that the current CEOs inherited, says Peter Henning. He's a former Justice Department and SEC lawyer. And he says these current CEOs were sometimes forced into government solutions like the federal bailout, or dubious deals with weaker rivals.
PETER HENNING: You have the government forcing banks to walk the plank. And you can question whether this is the right way for the government to have used its authority.
But former Fed vice chair Alice Rivlin says we shouldn't let the current CEOs entirely off the hook. She says, if we want to fix the economy, we have to talk to them.
ALICE RIVLIN: The big question now is not whose fault it was, although we can learn something from that. It's what do we do now?
And how do we keep the current CEOs from following in the footsteps of their predecessors?
In Washington, I'm Nancy Marshall Genzer for Marketplace.
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