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CEOs of some of the largest US banks have faced House Financial Services for the first time since the financial crisis on Wednesday, armed with sound balance sheets, but lawmakers have questioned leaders more on social issues than on fundamentals from the company.
Chief Executive Officers of JPMorgan Chase & Co, Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley, State Street Corp. and the Bank of New York Mellon Corp. have entered the audience room, ready to argue that Wall Street had reformed the 2007-2009 Crisis Practices and accentuated the banks' contribution to the economy in general.
But the tone, the questions and the actors were very different from those of ten years ago when legislators focused on banks' ability to protect the financial system and avoid further bailouts. Among the panel's CEOs, only JPMorgan's Jamie Dimon was at the helm of his bank before the financial crisis.
The audience was led by Democrat Representative Maxine Waters and brought together prominent first-year representatives, such as progressives, including Alexandria Ocasio-Cortez.
Democratic lawmakers have focused many of their questions on bank relations, seeking answers on the financing of gun and fossil fuel manufacturers.
Efforts to gain favor with the capital in recent weeks, such as raising the minimum wage or withdrawing from private prisons, have garnered the praise of committee politicians, but have not prevented legislators from pushing banks to play a role in the inequality of wealth and diversity of businesses.
Nevertheless, bank executives had some chance to point out hoped-for points of discussion, such as their positive contribution to the economy, when Republican legislators questioned them about more systemic issues.
Democratic Representative Carolyn Maloney has asked Dimon, a member of JPMorgan, to engage in a policy to reduce the bank's financing of arms manufacturers. Last year, Citi and Bank of America announced that they would no longer provide certain banking services to firearms manufacturers.
Some Republican lawmakers criticized such policies on Wednesday, with Representative Bill Posey cautioning banks against any retention of funding from legal companies and Sean Duffy accusing Bank of America of depriving Americans of Second Amendment rights.
Waters also asked three of the bank directors that they had discovered suspicious activity in their Russian-linked banks.
Citi CEO Michael Corbat declined to comment, citing an ongoing investigation into the case. The CEOs of Bank of America and Morgan Stanley said they conducted internal investigations and found no suspicious activity.
Dimon said JPMorgan "will never lose sight of what we have learned". Nevertheless, the bank has taken steps that have largely helped prevent another crisis, said Dimon.
Since the crisis, the country's largest banks have added more than $ 800 billion in capital to strengthen the financial system. In the months leading up to the hearing, banks also made a series of announcements showing how they help customers and communities.
Bank of America announced on Tuesday that it would increase its minimum hourly wage from $ 15 to $ 20 by 2021.
Last month, JPMorgan said it would no longer fund the private penitentiary sector and invest $ 350 million in vocational training programs.
Goldman Sachs has publicly set targets for the recruitment of women and minority groups, an initiative that Citigroup also took at the end of last year.
Wells Fargo & Co was not present at the hearing since former CEO Tim Sloan resigned abruptly last month, two weeks after his appearance before the same committee. – Reuters
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