By Arun Kumar, IANS,
Washington : Facing criticism about their use of billions of dollars in government aid, top executives from eight of the America’s largest financial institutions, including Citibank’s Indian American CEO Vikram Pandit, Wednesday asserted they are continuing to lend.
At a closely-watched hearing before the House Financial Services Committee, Pandit said: “American people are right to expect that we use funds responsibly, quickly and transparently to help American families, businesses and communities.”
“They also have a right to expect a return on this investment,” said Pandit.
He was joined on the witness table by seven other CEOs including Bank of America chairman and CEO Ken Lewis, JPMorgan Chase’s Jamie Dimon and John Stumpf of Wells Fargo.
They all defended their actions since taking hold of $165 billion last fall, adding that without government assistance, credit would be even harder to obtain.
“We are still lending, and we are lending far more because of the TARP programme,” said Lewis, whose firm has received $45 billion in government assistance from the Troubled Asset Relief Programme, or TARP.
He told lawmakers that his company extended more than $115 billion in new credit to consumers and businesses during the fourth quarter.
Public resentment for these banks has soared in recent weeks amid concerns that some financial institutions have used taxpayer money for purposes other than lending, at a time when taxpayers are struggling to stay in their homes or losing their jobs.
Wells Fargo, for example, cancelled a planned trip to Las Vegas for members of its mortgage team after news reports blasted it as a “junket” that wasted taxpayer money. Citigroup has come under fire for planning to buy a new corporate jet before the White House talked it out of the idea.
Committee chairman Barney Frank noted the taxpayer outrage in his opening remarks saying, “There is a great deal of anger in the country, much of it justified, about past practices.”
Bank of America, Citigroup, JPMorgan Chase and Wells Fargo received the bulk of the first round of capital injections from the Treasury Department last year. Goldman Sachs, Morgan Stanley, Bank of New York Mellon and State Street were the other four companies in the Treasury’s initial programme.