This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bank CEOs Grilled on Capitol Hill

WASHINGTON ( TheStreet) -- A few interesting details emerged from the great Wall Street Inquisition on Wednesday, as bank CEOs issued tacit admissions of failure, defended their firms' size and pay practices, and outlined ideas for regulatory reform.

Appearing before the Financial Crisis Inquiry Commission, Goldman Sachs (GS - Get Report) CEO Lloyd Blankfein added fuel to a scandal of secrecy about the government's handling of payouts to American International Group (AIG - Get Report) counterparties. Blankfein said regulators never asked his bank -- which received one of the largest claims -- to take a haircut on its derivative holdings.
Blankfein
The appearance of Goldman Sachs CEO Lloyd Blankein (above) grew contentious at times.

Blankfein's comments turned up the heat on Treasury Secretary Timothy Geithner, who was then a key decision-maker about the counterparty payouts in his role as chairman of the Federal Reserve Bank of New York. The Fed paid AIG's counterparties 100 cents on the dollar for their positions, despite the fact that those firms would have received nothing had AIG failed. Blankfein's comments indicated that the Fed did little to no haggling to preserve taxpayer money.

The House Oversight Panel has subpoenaed information from the New York Fed, and Geithner is expected to testify about the matter next week. A revelation earlier this week that the Securities and Exchange Commission allowed AIG to keep certain information about counterparty assets hidden until 2018 has turned the matter into something like a regulatory trifecta of secrecy.

Another interesting revelation from Blankfein and his Morgan Stanley (MS - Get Report) counterpart, John Mack, was that although the markets were terrified that banks would be nationalized at the start of 2009, the possibility never entered the minds of top managers.
1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AIG $62.41 0.95%
BAC $17.12 0.59%
GS $209.31 0.25%
JPM $67.96 0.95%
MS $39.33 1.40%

Markets

DOW 17,721.63 +102.12 0.58%
S&P 500 2,070.40 +7.29 0.35%
NASDAQ 4,995.2350 +8.3680 0.17%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs