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Obama tells banks 'work together' | Obama tells banks 'work together' |
(about 2 hours later) | |
President Barack Obama has met with top US bankers to discuss his latest plans to stabilise the US financial system and boost the US economy. | President Barack Obama has met with top US bankers to discuss his latest plans to stabilise the US financial system and boost the US economy. |
Mr Obama called the bosses of the biggest US banks to the White House and told them: "We are in this together." | Mr Obama called the bosses of the biggest US banks to the White House and told them: "We are in this together." |
The president said that his message to the bankers was "show some restraint." | |
The boss of Goldman Sachs said after the meeting "the problems will be solved" and "we are at the end of beginning, the hard works starts now." | The boss of Goldman Sachs said after the meeting "the problems will be solved" and "we are at the end of beginning, the hard works starts now." |
He said the money spent on stimulating the economy would be money well spent. | He said the money spent on stimulating the economy would be money well spent. |
Mr Obama said that he had asked the bankers to "show some restraint. Show that you get that this is a crisis and everybody has to make sacrifices. | |
They agreed and they recognized it," he said. "Now, the proof of the pudding is in the eating." | |
The meeting was a bridge-building exercise by the Obama administration after coming under fire last week for allowing huge bonuses to be paid to AIG executives. | The meeting was a bridge-building exercise by the Obama administration after coming under fire last week for allowing huge bonuses to be paid to AIG executives. |
Far-reaching plans | Far-reaching plans |
There are three measures needed to turn the economy around, said Lloyd Blankfein, chief executive of Goldman Sachs: "Stimulating the economy, arresting the fall in asset prices and fixing the financial system." | There are three measures needed to turn the economy around, said Lloyd Blankfein, chief executive of Goldman Sachs: "Stimulating the economy, arresting the fall in asset prices and fixing the financial system." |
All three were now in place, he added. | All three were now in place, he added. |
"The capital markets are recovering and the stimulus [package] is just starting to get into people's pockets," said Jamie Dimon, chief executive of JP Morgan Chase. | "The capital markets are recovering and the stimulus [package] is just starting to get into people's pockets," said Jamie Dimon, chief executive of JP Morgan Chase. |
Richard Davis, chief executive of Bancorp, was equally upbeat following the meeting. He said he could see the "beginning of a turn [in the economy], we can start to see a bottom." | Richard Davis, chief executive of Bancorp, was equally upbeat following the meeting. He said he could see the "beginning of a turn [in the economy], we can start to see a bottom." |
He also said the 13 bankers present at the meeting understood the public's anger at bonuses paid to executives of banks that have received government aid. | He also said the 13 bankers present at the meeting understood the public's anger at bonuses paid to executives of banks that have received government aid. |
However, he said that the money Bancorp took from the government "was a good investment, it was not a bail-out." | However, he said that the money Bancorp took from the government "was a good investment, it was not a bail-out." |
The government is getting a good rate of interest and it will get its money back, he said. | The government is getting a good rate of interest and it will get its money back, he said. |
Despite the optimism of the leading bankers, John Mack, chief executive of Morgan Stanley, sounded a more cautionary note about the time needed for the government measures to take effect. | Despite the optimism of the leading bankers, John Mack, chief executive of Morgan Stanley, sounded a more cautionary note about the time needed for the government measures to take effect. |
"Nothing is going to be instantaneous, it's going to take time," he said. | "Nothing is going to be instantaneous, it's going to take time," he said. |
Toxic assets | Toxic assets |
The US government announced a plan earlier this week to work together with banks and private investors to help turn the economy around. | The US government announced a plan earlier this week to work together with banks and private investors to help turn the economy around. |
The "Public-Private Investment Programme" is designed to buy up to $1 trillion (£686bn) worth of toxic assets to help repair banks' balance sheets. | The "Public-Private Investment Programme" is designed to buy up to $1 trillion (£686bn) worth of toxic assets to help repair banks' balance sheets. |
Specifically, it will purchase the troubled mortgages and securities that have been at the root of the credit crunch. | Specifically, it will purchase the troubled mortgages and securities that have been at the root of the credit crunch. |
And on Thursday US Treasury Secretary Timothy Geithner outlined on Thursday far-reaching plans to strengthen government authority over the US financial system. | And on Thursday US Treasury Secretary Timothy Geithner outlined on Thursday far-reaching plans to strengthen government authority over the US financial system. |
Mr Geithner told a US House Committee that a simpler, more effective regulatory system was needed. | Mr Geithner told a US House Committee that a simpler, more effective regulatory system was needed. |
The measures are designed to prevent the kind of systemic risk-taking among banks that contributed to the current financial crisis. | The measures are designed to prevent the kind of systemic risk-taking among banks that contributed to the current financial crisis. |
The Obama administration has made it clear that it sees the banks as essential to an economic recovery. | The Obama administration has made it clear that it sees the banks as essential to an economic recovery. |
The chairman of the Federal Reserve, Ben Bernanke, recently told Congress that while the recession may end in 2009, that would happen "only if" financial stability was restored. | The chairman of the Federal Reserve, Ben Bernanke, recently told Congress that while the recession may end in 2009, that would happen "only if" financial stability was restored. |