Trump huddles with bankers on coronavirus economic relief
President Trump met with close to a dozen chiefs of the largest U.S. banks and their advocates in Washington, D.C., as the financial sector faces pressure to prepare for an economic slowdown driven by the coronavirus outbreak.
Trump huddled with several of the CEOs of the biggest American commercial and investment banks Wednesday, including Michael Corbat of Citigroup, Bryan Moynihan of Bank of America, Charles Scharf of Wells Fargo and David Solomon of Goldman Sachs.
Gordon Smith, co-president of JPMorgan Chase, attended the meeting on behalf of the largest U.S. bank as CEO Jamie Dimon recovers from heart surgery.
American Bankers Association President Rob Nichols and Consumer Bankers Association President Richard Hunt, and Independent Community Bankers of America President Rebeca Romero Rainey attended the meeting on behalf of the their trade groups representing the vast majority of U.S. retail banks.
Stephen Schwartzman, CEO of investment firm BlackStone; Ken Griffin, chief executive of hedge fund Citadel; Truist Financial chief executive Kelly King; and US Bancorp chief executive Andrew Cecere also attended the meeting, which included Treasury Secretary Steven Mnuchin, White House economic adviser Larry Kudlow, senior adviser Jared Kushner and Small Business Administration chief Jovita Caranza.
Trump called the meeting of top U.S. bankers to explore ways to support small and midsize businesses likely to suffer steep declines in revenue throughout the coronavirus outbreak, according to industry sources.
As the number of confirmed coronavirus cases in the U.S. exceeds 1,000, states and cities have taken drastic measures to slow the spread of the potentially fatal respiratory illness. Canceled events, bans on large gatherings and social distancing efforts are likely to dampen consumer spending, a dire blow to businesses with small staffs and tight margins.
The bankers and industry advocates meeting with Trump on Wednesday highlighted efforts to help customers facing hardships by easing fees, delaying deadlines and offering flexibility with the terms of their accounts and loans.
Corbat and several fellow bank CEOs also stressed that their companies were well equipped to handle any economic downturn caused by the virus.
“This is not a financial crisis,” Corbat told Trump and reporters ahead of the meeting.
Kevin Fromer, president of the Financial Services Forum, a trade group representing the eight largest U.S. banks, said in a statement before the meeting that “The nation’s largest banks remain strongly capitalized, resilient, and fully capable of fulfilling their important role in the economy, even under times of stress.”
Several bankers also urged Trump to support a fiscal stimulus plan designed to spur the economy and protect small and midsize businesses facing the greatest threats from a downturn.
“All of us in this room are fortunate to be in the position to take care of our workforces and I know that that large corporate America is there 110 percent for their employees,” Griffin said.
“The weak spot is smaller businesses that don’t have the financial flexibility, and in particular, our workers who are part of the gig economy.”
Trump said ahead of the meeting that will announce proposals to fight the coronavirus and its economic impact during a speech from the Oval Office on Wednesday night. Mnuchin added that the president has “significant” executive authority to protect the economy and will be rolling out “various proposals” without specifying a timeline or details
Banks are also facing political pressure from Democrats and liberal groups who fear the industry may use a time of economic crises to seek looser bank regulations after years of regulatory rollbacks under President Trump and regulators appointed by the president.
The Bank Policy Institute (BPI), a banking industry research and advocacy group, took heat from financial sector critics earlier in March when it suggested the Fed could ease capital and liquidity rules, intended to protect them from large economic shocks, to help keep credit flowing through a financial squeeze.
“Wall Street has a long track record of screaming for assistance or deregulation no matter what problems the country faces,” said Marcus Stanley, policy director for Americans for Financial Reform, a nonprofit supporting strict banking regulations.
“Tough regulation and supervision is good for financial stability and consumer protection,” he added. “We shouldn’t give in to industry demands and add to what has already been excessive deregulation under this administration.”
Greg Baer, chief executive of BPI, previously defended the group’s proposals as backed by “robust research and analysis,” adding that “as the Fed and other policymakers work to help American companies and workers get through the current turmoil, we trust that they will base their decisions on data, not diatribes.”
Industry sources insisted that bankers were not seeking coronavirus-related regulatory relief and would focus on the ways that the industry is preparing for a slowdown.
“It’s more of a check-in with the industry and an opportunity for the banks to talk about [what] they are doing to prepare and help customers,” said an industry source.
Updated at 4:50 p.m.