WALL STREET bank executives submitted to a public scolding in the US Congress yesterday over how they used $176 billion (€136.3 billion) in bailout money without making a noticeable impact on the anaemic economy.
But there were only flashes of anger in the first hours of a congressional hearing on the troubled bailout plan as the chief executives struck a contrite tone. “I feel more like corporal of the universe, not captain of the universe at this moment,” said Bank of America chief executive Ken Lewis as he came under intense questioning from California Democratic representative Maxine Waters.
Lawmakers’ opening statements reflected public outrage over the economic crisis but the questioning stayed mostly civil in contrast to a grilling last week by many of the same lawmakers of securities regulators over Bernard Madoff’s alleged fraud.
Questions abound about what the banks have done with the bailout money, given an ongoing credit crisis that has added to the country’s deteriorating economy.
Yesterday’s hearing came a day after US treasury secretary Timothy Geithner failed to inspire market confidence over the government’s financial bailout plans and sent stocks tumbling.
Democratic representative Barney Frank, chairman of the House of Representatives financial services committee, opened proceedings by telling the bankers they needed to understand Americans’ anger and co-operate with lawmakers willingly, “not grudgingly, not doing the minimum”.
“I want to know where the money has gone,” said Democrat Paul Kanjorski. He told them that if their banks did not use the money, “please find a way to return that money before you leave town”.
Mr Geithner yesterday hit back at criticism that his rescue plan lacked specifics as he hinted that the Obama administration might return to Congress to ask for more bailout funds at a later date.
His comments came as a senior treasury official told reporters that Mr Geithner would urge other nations to join the US in taking aggressive action to fight the crisis at this weekend's meeting of finance ministers and central bank chiefs from the Group of Seven industrialised nations. – (Reuters, Financial Timesservice)
