This Day On The Street
Continue to site right-arrow
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
TheStreet Open House

Bank CEOs Grilled on Capitol Hill

Stocks in this article: GSAIGBAC

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) CEO Lloyd Blankfein added fuel to a scandal of secrecy about the government's handling of payouts to American International Group (AIG) 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) 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

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,677.90 +216.58 1.32%
S&P 500 1,950.82 +23.71 1.23%
NASDAQ 4,452.7920 +69.9450 1.60%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs