Obama, Bank Leaders Discuss 'Toxic Assets'

President Obama and top U.S. bank executives on Friday talked about the need to clear bad investments from institutions' books and agreed on the need to update financial sector regulations, at a meeting at the White House.

"The goal here is to work together," Wells Fargo's Chief Executive Officer John Stumpf said after the two-hour meeting.

Obama invited top executives from 15 major banks — including the chief executives from JPMorgan Chase, Citigroup, Bank of America and Wells Fargo — to a meeting that focused on the administration's aim to overhaul financial regulations.

White House spokesman Robert Gibbs said the president stressed the need to deal with toxic assets so the banks would be able to start lending again. He also said the group agreed the regulatory framework needs to be updated.

"There was next a discussion about regulatory reform, and it's fair to say that they agreed on the need to update the framework of regulation and [on] that being important," Gibbs said.

Gibbs also said the issue of executive compensation was discussed, but he had no details at an afternoon briefing.

Lawmakers and the public have railed about bonuses paid by companies that have received federal bailout funds, particularly since the recent disclosure that insurer American International Group had paid out more than $165 million in bonuses after taking bailout money.

Earlier this week, the president criticized the insurance giant for "recklessness and greed," but he has since softened his tone, saying the country "can't afford to demonize" the investors who will get the economy moving again.

Jamie Dimon, chief executive officer of JPMorgan Chase, said the president wanted the bankers to realize how much public animosity there was over the executive bonuses.

"We know mistakes were made," Dimon said in an interview with CNBC.

Friday's meeting came days after the administration announced details of a plan to help banks unload up to $1 trillion in toxic assets so they could resume normal lending.

Obama also outlined plans this week for tighter regulations on the financial sector, including new powers that would allow the government to take over some troubled nonbank financial institutions — including hedge funds and insurance companies.

From NPR and wire reports

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