Does the emirate’s crisis indicate a lack of economic co-ordination between Arabs?
“Given the difficulty business people are having as lending has declined and given the exceptional assistance banks received to get them through a difficult time … we expect them to explore every responsible way to help get our economy moving again,” he said.
‘Fat cat bankers’
Among those attending the White House meeting was Kenneth Lewis, chief executive of Bank of America.
He pledged that his bank would lend $5bn more to small- and mid-sized businesses in 2010 than it did in 2009, the bank said following the meeting.
Fellow US banking giant JP Morgan said last month it would boost such lending by $4bn.
During Monday’s meeting Obama also exhorted the executives to drop their opposition to an overhaul of the nation’s financial industry.
“If they wish to fight common sense consumer protections, that’s a fight I’m more than willing to have,” Obama told reporters.
The US president’s stern lecture to the heads of the US big banks follows an escalation of criticism aimed at Wall Street from the White House.
In an interview with CBS 60 Minutes on Sunday, Obama rebuked executive pay at firms that only last year required tax dollars to keep their doors open.
“I did not run for office to be helping out a bunch of fat cat bankers on Wall Street,” he said.
Monday’s meeting came as Citigroup announced it was repaying $20bn in bailout money it received from the US treasury, in a bid to reduce government influence over the banking giant.
|Citigroup was among the hardest hit of the big US banks by the credit crisis [AFP]|
The government will also sell its stake in the company, meaning it will no longer be able to impose caps on executive pay and dividends.
The New York-based bank was among the hardest hit by the credit crisis and rising loan defaults and got one of the largest bailouts of any banks during the financial crisis.
The government gave it $45bn in loans and agreed to protect losses on nearly $300bn in risky investments.
Shortly afterwards San Francisco-based bank Wells Fargo announced plans to sell $10.4bn in new stock to help repay $25bn in bailout aid.
The move will also extricate Wells from the pay restrictions and close oversight that came with the bailout programme.
Despite Obama’s pointed words, US bank bosses have said that lending is limited by factors beyond their control, including the sluggish economy and tighter oversight by regulators.
The fragile state of the US economy has made businesses reluctant to expand and makes banks gloomy about their prospects.
Meanwhile, US regulators are urging banks to be more sceptical about potential borrowers and forcing banks to keep larger cushions of capital to protect against future losses, in turn meaning there is less money available to lend.