Top Bank Officials Feel Good About Plans for Solving Foreclosure Related Crisis
Top officials of the biggest banks in America said on Friday 27th March that they feel good about the plans the Obama administration is taking to solve the foreclosure related crisis. They are waiting to get more specific details from White House.
While talking to CBS News, President Obama underlined the need for the lending lobby to show more restraint and to let others know that the crisis is affecting all and that “everybody has to make sacrifices.” Obama said that the banking group agreed to it and recognized its grave implications. But “now the proof in the pudding is in the eating,” concluded Obama.
The bankers said that the government wants them to kick off lending quickly. It is this that is at the heart of the problem. Johan Mack of Morgan Stanley said, “People are looking at that. It\’s positive. We think it\’s the right thing to do and now we just need to get the details.”
The government recently released a programme that would free the banks from the soured assets. These investments have blocked flow of capital and prevented banks from resuming the normal day-to-day work of lending and attending to the interests and businesses of consumers.
According to the plan the administration will form partnerships with private investors. The Federal Reserve and Federal Deposit Insurance Corporation plans to buy as much as $1 trillion worth of these soured assets from the banks. There is concern whether the private investors would come forth and whether the banks would be agreeable to sell the assets at the lowered prices that would be offered to them.
The bankers said that the meeting with the President was positive. They promised to work with the government so as to see to the improvement of the health of the economy. Robert Kelly of Bank of New York said, “We want to see the American recovery.”
Invitations to the meeting had been sent out the chief executives of 15 banks to come to the meeting at the White House. They were urged by the president to deal with the toxic assets. There were also talks about remedial measures to check the flow of increasing foreclosures. Among the issues were more stringent regulations, compensation to the executives, financial bail out and above all the understanding of what the American public are going through currently. Timothy Geithner, the secretary of the Treasury met the CEOs separately.
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