President Barack Obama said he told the chiefs of the biggest US banks that bonuses are not acceptable while many Americans struggle to meet basic expenses in the midst of a severe recession.
Referring to a meeting Friday at the White House with the chief executives of banks that have received US government bailout funds, Obama said bankers need to show some restraint from big bonuses during the financial crisis.
“That's just not acceptable,” Obama said during an interview on CBS television's “Face the Nation.”
He said he told the chief executives: “Show some restraint. Show that you get that this is a crisis and everybody has to make sacrifices.”
Executive bonuses at troubled financial institutions, including insurer American International Group Inc, have sparked anger among US lawmakers and the American public, who are outraged that the institutions doled out multimillion-dollar bonuses while receiving taxpayer funds instead of providing credit to individuals and small businesses.
Executives at AIG, which has received about $180 billion in taxpayer bailout money, were paid $165 million in bonuses. Many recipients of the bonuses have agreed to give the back. “Had we not seen some healthy expressions of anger, we wouldn't have gotten $50 million of those bonuses back.” Obama said.
Attorneys general in New York, New Jersey and several other states are examining the AIG bonus matter.
Obama's meeting on Friday included the chief executives of JPMorgan Chase & Co, Wells Fargo & Co, Bank of America Corp, Goldman Sachs, Citigroup Inc and Morgan Stanley, among others.
The meeting touched on several issues facing the banking industry, including reforming regulation and pushing soured assets off of banks' balance sheets as part of a plan involving the government and private investors.
Many of the CEOs said after the meeting that they are waiting for more details of the plan, which the Treasury Department envisions cleansing banks of up to $1 trillion of distressed loans and securities.
The Democratic president said in the CBS interview that the bankers acknowledged the public outrage. Obama said that it is not easy to ask taxpayers who follow the rules, but struggle with their mortgage payments and medical bills, to make sacrifices if banks are not doing the same.
“It's very difficult for me as president to call on the American people to make sacrifices to help shore up the financial system if there's no sense of mutual obligation ... and mutual help,” Obama said.
“There's no separation between Main Street and Wall Street,” he said. “We're all in this together.” (Reuters)