Obama to announce bank fee plan

Announcement follows questioning of top bank executives over their role in financial crisis.

Top Wall Street executives testify at hearing on capitol hill
Bankers questioned on Capitol Hill admitted mistakes that led to global financial crisis [AFP]

The measures, expected on Thursday, were announced a day after top Wall Street executives were questioned by a US commission on Capitol Hill over their role in the economic crisis.

Gibbs said that some executives were acting as if nothing had changed since the financial crisis.

Mistakes admitted

During the hearing bankers admitted mistakes that led to the global financial crisis.

Brian Moynihan, the new chief executive and president of Bank of America, acknowledged that the banking industry “caused a lot of damage” over the course of the crisis which led to the government pumping hundreds of billions of dollars into the firms to keep them afloat.

“Never has it been clearer how mistakes made by financial companies can affect Main Street, and we need to learn the lessons of the past few years,” the head of the largest US bank said.

John Mack, chairman of Morgan Stanley financial services company, said that in retrospect, many firms were “too highly leveraged, took on too much risk and did not have sufficient resources to manage those risks effectively in a rapidly changing environment”.

However, Lloyd Blankfein, Goldman Sachs chairman and chief executive, cautioned against over-regulation. 

“We know from economic history that innovation, and the new industries and new jobs that result from it, require risk taking,” he said.

Concern over bonuses

The banking chiefs also addressed public concerns over large bonuses paid to top executives as compensation practices that critics say fueled the crisis.

“Many have questioned the extent to which compensation practices at financial institutions incentivized excessive risk taking. I think some of those concerns are quite legitimate,” Jamie Dimon, chairman and chief executive of JPMorgan Chase bank, said.

Phil Angelides, chairman of the inquiry commission, said the forum “may be our last best chance to take stock of what really happened so that we can learn from it and restore faith in our economic system”.

“If we ignore history, we’re doomed to bail it out again,” Angelides, a former California state treasurer, said.

Source: News Agencies